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Wells Fargo: Financial Winner

Tickers in this article: BAC C I:BKX JPM WFC

NEW YORK ( TheStreet) -- Wells Fargo was the winner among the nation's banks on Thursday, with shares rising over 2% to close at $37.42.

The broad indices ended with slight gains, as news of economic stimulus in Japan overshadowed rising U.S. unemployment claims.

The Nikkei 225 in Japan rose by 2.2% after the Bank of Japan announced aggressive monetary easing, increasing its monthly government bond purchases to about 7 trillion yen from roughly 4 trillion yen a month.

The Labor Department reported that initial unemployment claims in the U.S. increased by 28,000 to a four-month high of 385,000 in the week ended March 30 from 357,000 in the prior week. Economists polled by Thomson Reuters were expecting net jobless claims to decline to 350,000.

The four-week moving average for first-time unemployment claims increased by 11,250 to 354,520.

The KBW Bank Index rose 1% to close at 55.16, with all but two of the 24 index components showing gains.

Big Four Cheap to Forward Earnings

First-quarter earnings season for banks will be kicked off by JPMorgan Chase and Wells Fargo before the market opens on April 12. As the broad recovery for bank stocks continues, the "big four" U.S. banks -- which also include Bank of America and Citigroup -- continue to have low relative stock valuations.

For an outline on what to expect from the largest financial players next week, please see TheStreet's earnings preview for the big four .

Jefferies analyst Ken Usdin said in a report on Thursday that, on average, regional banks trade for 1.5 times tangible book value and 12.6 times 2014 earnings estimates. The big four provide a stark comparison to those numbers.

  • JPMorgan's shares closed at $47.49 Thursday, trading for 1.3 times tangible book value, according to Thomson Reuters , and for 8.2 times the consensus 2014 earnings estimate of $5.81 a share. Analysts expect the company to report first-quarter earnings of $1.39 a share next Friday. The consensus EPS estimate for all of 2013 is $5.48.
  • Wells Fargo's shares trade for 1.7 times tangible book value and for 9.6 times the consensus 2014 EPS estimate of $3.89. When the company reports its first-quarter results next Friday, analysts expect EPS of 88 cents. The consensus EPS estimate for all of 2013 is $3.65.
  • Bank of America's stock closed at $11.90 Thursday, trading for 0.9 times tangible book value and for 9.1 times the consensus 2014 EPS estimate of $1.31. The company is scheduled to announce its first-quarter results on April 17, with a consensus EPS estimate of $23 cents. The consensus EPS estimate for all of 2013 is 98 cents.
  • Citigroup's shares closed at $42.77 Thursday, trading for 0.8 times tangible book value and for 8.2 times the consensus 2014 EPS estimate of $5.22. Analysts on average expect Citi to post first-quarter EPS of $1.18 when the company reports on April 15. The consensus EPS estimate for all of 2013 is $4.61.

Wells Fargo