Wells Fargo: Modest Upside Amid Improving Efficiency but Mixed Revenue Trends Support Hold Rating

Analyst Betsy Graseck of Morgan Stanley maintained a Hold rating on Wells Fargo, retaining the price target of $97.00.

Betsy Graseck has given his Hold rating due to a combination of factors tied to Wells Fargo’s current valuation and earnings outlook. While the bank delivered a modest EPS beat in 4Q25 and is clearly benefiting from renewed balance sheet growth now that the asset cap is no longer binding, revenue was softer than expected, which weighed on the stock. Management’s guidance for net interest income remains solid, with incremental contribution from markets-related NII as the firm increases client financing activity, but fee income trends are somewhat weaker, prompting only very small upward or downward adjustments to forward EPS.

At the same time, Wells Fargo is executing on a multi‑year cost‑efficiency program, including substantial severance over recent quarters that should support a lower structural expense base and better efficiency ratios over the next few years. Capital deployment is tilting more toward supporting loan growth rather than aggressive share repurchases, keeping capital levels safely above management’s target but slightly limiting near‑term capital return upside. Return on tangible common equity is projected to improve but still falls just short of the company’s medium‑term goal, leaving the timing and magnitude of further profitability gains an open question. Taken together, these dynamics justify maintaining an Equal Weight (Hold) stance with a price target that implies only modest upside from current levels.

In another report released today, TD Cowen also maintained a Hold rating on the stock with a $100.00 price target.