Shares of Wells Fargo (WFC) gained in pre-market trading, even though the financial services company reported mixed results in the fourth quarter. The bank reported earnings of $1.43 per share, compared to earnings of $0.86 per share in the same period last year. This was above consensus estimates of $1.35 per share.
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Furthermore, WFC’s Q4 revenues declined slightly by 0.5% year-over-year to $20.4 billion, below Street estimates of $20.6 billion. Additionally, the bank’s investment banking fees surged by 59% year-over-year to $725 million in the fourth quarter.
WFC Expects Net Interest Income to Grow in FY25
In the fourth quarter, WFC’s net interest income declined by 7% year-over-year to $11.8 billion. This decline was driven by changes in pricing and deposit mix. However, in FY25, the bank has forecasted a 1% to 3% rise in net interest income. Net interest income, a critical measure of earnings derived from loans, remains a key driver of the bank’s profitability.
WFC’s Management Comments on the Results
WFC’s CEO Charlie Scharf commented on the results, “Our earnings profile continues to improve, we are seeing the benefit from investments we are making to increase our growth…we maintained a strong balance sheet, we returned approximately $25 billion of capital to shareholders, and we made significant progress on our risk and control work.”
WFC Announces Dividend and Stock Buyback
Additionally, WFC announced a dividend of $0.40 per share and repurchased stock worth $4 billion in the fourth quarter.
Is Wells Fargo a Buy, Sell, or Hold?
Analysts remain cautiously optimistic about WFC stock, with a Moderate Buy consensus rating based on seven Buys and seven Holds each. Over the past year, WFC has surged by more than 50%, and the average WFC price target of $80.64 implies an upside potential of 13.3% from current levels. These analyst ratings are likely to change following WFC’s results today.
