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Wells Fargo (WFC)
NYSE:WFC
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Wells Fargo
(NYSE:WFC)
68Neutral
Positive Factors
Earnings Growth
Higher investment advisory and investment banking fees and lower expenses boosted earnings.
Regulatory Progress
Regulators are recognizing fulfilled obligations, which is an important step forward for the company.
Negative Factors
Asset Cap
The removal of the Fed-imposed asset cap remains the most significant unresolved issue and potential positive catalyst ahead.
Earnings Headwinds
Wells Fargo is unlikely immune to earnings headwinds amid a weaker economy ahead.
Wells Fargo (WFC) vs. S&P 500 (SPY)
Market Cap
$204.11B
Dividend Yield2.48%
Average Volume (3M)20.46M
Price to Earnings (P/E)11.2
Beta (1Y)1.01
Revenue Growth3.22%
EPS Growth16.51%
CountryUS
Employees217,000
SectorFinancial
Sector Strength84
IndustryBanks - Diversified
Share Statistics
EPS (TTM)5.57
Shares Outstanding3,265,159,000
10 Day Avg. Volume26,554,515
30 Day Avg. Volume20,464,953
Financial Highlights & Ratios
PEG Ratio0.68
Price to Book (P/B)N/A
Price to Sales (P/S)3.06
Price to Cash Flow (P/CF)6.70
P/FCF Ratio3.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$79.72Price Target Upside27.53% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering18
Wells Fargo Business Overview & Revenue Model
Company DescriptionWells Fargo & Company, a diversified financial services company, provides banking, investment, mortgage, and consumer and commercial finance products and services in the United States and internationally. It operates through four segments: Consumer Banking and Lending; Commercial Banking; Corporate and Investment Banking; and Wealth and Investment Management. The Consumer Banking and Lending segment offers diversified financial products and services for consumers and small businesses. Its financial products and services include checking and savings accounts, and credit and debit cards, as well as home, auto, personal, and small business lending services. The Commercial Banking segment provides financial solutions to private, family owned, and certain public companies. Its products and services include banking and credit products across various industry sectors and municipalities, secured lending and lease products, and treasury management services. The Corporate and Investment Banking segment offers a suite of capital markets, banking, and financial products and services to corporate, commercial real estate, government, and institutional clients. Its products and services comprise corporate banking, investment banking, treasury management, commercial real estate lending and servicing, equity, and fixed income solutions, as well as sales, trading, and research capabilities services. The Wealth and Investment Management segment provides personalized wealth management, brokerage, financial planning, lending, private banking, and trust and fiduciary products and services to affluent, high-net worth, and ultra-high-net worth clients. It also operates through financial advisors. Wells Fargo & Company was founded in 1852 and is headquartered in San Francisco, California.
How the Company Makes MoneyWells Fargo generates revenue primarily through its interest and non-interest income channels. Interest income comes from loans and securities, where the company earns money by charging interest on loans provided to consumers and businesses, and from earning interest on various securities. Non-interest income is derived from fees and commissions related to deposit accounts, investment products, wealth management, and transaction services. Additionally, the company earns money from mortgage banking activities, including loan origination and servicing, as well as from investment banking and trading operations. Strategic partnerships, such as co-branded credit cards and financial technology collaborations, also contribute to its earnings. Furthermore, factors such as interest rate fluctuations, regulatory changes, and economic conditions significantly influence Wells Fargo's profitability.
Wells Fargo Financial Statement Overview
Summary
Wells Fargo exhibits strong profitability and revenue stability, supported by robust margins and improved leverage ratios. While the balance sheet indicates financial stability, the cash flow statement raises concerns about cash generation consistency. Continued focus on cash flow management and risk mitigation strategies would enhance overall financial health.Income Statement
Wells Fargo has shown a stable revenue base with a slight increase from $77.19 billion in 2023 to $77.96 billion in 2024. Despite a drop in total revenue from 2019, the company has improved its EBIT and net income margins over the years, indicating efficient cost management and profitability. The net profit margin improved to 25.3% in 2024, reflecting strong profitability. However, the lack of TTM data for certain metrics limits a comprehensive analysis.78
Positive
Balance Sheet
The balance sheet shows a strong equity base with stockholders' equity at $179.12 billion in 2024. The debt-to-equity ratio improved to 0.97 in 2024 from 1.18 in 2023, indicating reduced leverage. The equity ratio stands stable at around 9.3%, showing a consistent capital structure. However, the high total liabilities relative to assets present potential leverage risks.70
Positive
Cash Flow
Cash flow analysis reveals fluctuating free cash flow, with a significant drop in 2024. The free cash flow to net income ratio is unavailable due to zero free cash flow in 2024, indicating potential cash management issues. However, the company has previously demonstrated positive operating cash flows, suggesting resilience in operational cash generation.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 77.96B | 77.20B | 73.78B | 78.49B | 72.34B | Gross Profit |
| 77.96B | 82.60B | 73.78B | 78.49B | 72.34B | EBIT |
| 28.49B | 28.67B | 14.97B | 28.85B | 4.04B | EBITDA |
| 24.00B | 27.91B | 22.28B | 37.31B | 0.00 | Net Income Common Stockholders |
| 19.72B | 19.14B | 13.68B | 22.11B | 1.79B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 142.41B | 316.46B | 272.75B | 411.47B | 485.00B | Total Assets |
| 1.93T | 1.93T | 1.88T | 1.95T | 1.96T | Total Debt |
| 173.08B | 219.47B | 226.01B | 195.10B | 271.95B | Net Debt |
| 30.67B | -17.75B | 66.86B | -39.13B | 7.34B | Total Liabilities |
| 1.75T | 1.75T | 1.70T | 1.76T | 1.77T | Stockholders Equity |
| 179.12B | 185.74B | 179.89B | 187.61B | 184.89B |
| Cash Flow | Free Cash Flow | |||
| 3.04B | 40.36B | 27.05B | -11.53B | 2.05B | Operating Cash Flow |
| 3.04B | 40.36B | 27.05B | -11.53B | 2.05B | Investing Cash Flow |
| -15.65B | 16.04B | -42.48B | -7.62B | 122.55B | Financing Cash Flow |
| -21.53B | 20.49B | -59.65B | -11.24B | -1.24B |
Wells Fargo Technical Analysis
Negative
62.51
Price Trends
73.37
Negative
73.29
Negative
65.80
Negative
Market Momentum
-0.78
Negative
43.86
Neutral
27.36
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WFC, the sentiment is Negative. The current price of 62.51 is below the 20-day moving average (MA) of 69.15, below the 50-day MA of 73.37, and below the 200-day MA of 65.80, indicating a bearish trend. The MACD of -0.78 indicates Negative momentum. The RSI at 43.86 is Neutral, neither overbought nor oversold. The STOCH value of 27.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WFC.
Wells Fargo Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $171.96B | 7.99 | 13.74% | 6.57% | 6.79% | 8.57% | |
80 Outperform | $657.34B | 11.59 | 17.25% | 2.03% | 12.48% | 23.05% | |
70 Outperform | $129.66B | 10.59 | 9.70% | 3.06% | 13.21% | -12.06% | |
70 Neutral | $273.39B | 11.19 | 9.24% | 2.84% | 13.06% | 4.94% | |
68 Neutral | $204.11B | 11.23 | 11.05% | 2.48% | 3.22% | 16.51% | |
65 Neutral | $116.02B | 10.37 | 6.04% | 3.58% | 8.20% | 49.26% | |
64 Neutral | $13.34B | 9.25 | 9.42% | 4.85% | 16.07% | -8.44% |
* Financial Sector Average
Performance Comparison
WFC
Wells Fargo
62.51
6.89
12.39%
BAC
Bank of America
35.95
0.87
2.48%
C
Citigroup
61.64
5.04
8.90%
HSBC
HSBC Holdings
49.89
12.71
34.19%
JPM
JPMorgan Chase & Co.
236.20
57.46
32.15%
MUFG
Mitsubishi UFJ
11.59
1.93
19.98%
Wells Fargo Earnings Call Summary
Earnings Call Date: Apr 11, 2025 | % Change Since: -0.95% | Next Earnings Date: Jul 15, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a balanced sentiment with notable achievements in earnings growth, credit performance, and strategic progress being offset by challenges such as declines in net interest income, economic uncertainty, and regulatory impacts. While the company is making progress in its strategic priorities and capital return, it faces headwinds from a volatile economic environment and regulatory uncertainties.Highlights
Increase in Diluted Earnings Per Share
Diluted earnings per share increased by 16% from a year ago, reflecting solid performance despite revenue decline from lower net interest income.
Capital Return to Shareholders
Returned $4.8 billion of capital to shareholders through dividends and share repurchases, with diluted average common shares outstanding down 8% from a year ago.
Credit Performance Improvement
Credit performance improved with lower net charge-offs driven by better performance in the commercial portfolio.
Progress on Strategic Priorities
Five consent orders were terminated in the first quarter, indicating significant progress in risk and control work.
Growth in Fee-based Revenue
Fee-based revenue grew across many businesses, driven by investments to diversify revenues.
Consumer and Commercial Loan Growth
Loan growth was modest, with pockets of increased demand from commercial clients.
Expansion in Commercial Banking
Strong growth in investment banking fees, especially in debt capital markets.
Lowlights
Decline in Net Interest Income
Net interest income declined by $341 million or 3% from the fourth quarter due to lower rates and fewer days in the quarter.
Non-interest Income Stability Concerns
Non-interest income was stable compared to a year ago, with impairments in the venture capital portfolio and losses from investment portfolio repositioning.
Uncertainty in Economic Environment
Anticipated slower economic environment in 2025 due to policy changes and trade barriers, posing risks to business performance.
Potential Impact of Regulatory Environment
Uncertainty regarding the impact of regulatory changes and the asset cap on future growth opportunities.
Commercial Loan Balances Stability
Average commercial loan balances were stable, with modest growth observed only in certain segments.
Company Guidance
During the Wells Fargo & Company First Quarter 2025 Earnings Conference Call, the company reported a 16% increase in diluted earnings per share year-over-year. Despite a decline in revenue due to lower net interest income, Wells Fargo saw growth in fee-based revenue across various businesses. The company returned $4.8 billion to shareholders through dividends and share repurchases, while its diluted average common shares outstanding decreased by 8% from the previous year. The bank's credit performance improved, with net charge-offs lower than both the previous year and the fourth quarter. Expenses were reduced as part of efficiency initiatives, and strong credit discipline was maintained. Strategic priorities included the termination of five consent orders in the first quarter, contributing to a total of eleven terminations since 2019, and significant progress in risk and control work. The company also noted growth in its card business, increased collaboration in wealth and investment management, and strong investment banking fee generation. Looking forward, Wells Fargo expects modest economic growth in 2025, with potential impacts from regulatory changes and trade policies, but remains confident in its strong balance sheet and ability to support customers.Wells Fargo Corporate Events
Stock BuybackFinancial Disclosures
Wells Fargo Reports Strong Q1 2025 Earnings Growth
Positive
Apr 11, 2025
Wells Fargo reported a net income of $4.9 billion, or $1.39 per diluted share, for the first quarter of 2025, reflecting a 16% increase in diluted earnings per share from the previous year. The company also repurchased 44.5 million shares of common stock and noted gains from the sale of a segment of its commercial mortgage servicing business, as well as tax benefits, despite some losses on debt securities.
Spark’s Take on WFC Stock
According to Spark, TipRanks’ AI Analyst, WFC is a Outperform.
Wells Fargo’s stock score reflects strong profitability and revenue stability, supported by robust margins and improved leverage ratios. While the technical indicators show mixed signals, the stock’s valuation remains appealing. The positive earnings call and corporate events, including leadership transitions and strong financial performance, further solidify the company’s position. However, potential risks in cash flow management and certain business segments should be monitored closely.
To see Spark’s full report on WFC stock, click here.
Executive/Board ChangesBusiness Operations and Strategy
Wells Fargo Announces Leadership Transition in CIB
Positive
Jan 30, 2025
On January 30, 2025, Wells Fargo announced the retirement of Jon Weiss, Co-CEO of Corporate & Investment Banking, effective June 1, 2025. Fernando Rivas, who joined the company in May 2024, will assume the role of sole CEO of Corporate & Investment Banking immediately. This leadership transition highlights Weiss’s significant contributions, including a 40% increase in net income and a 35% rise in revenue since he began leading CIB in 2020, positioning the business for future growth. The change is poised to further strengthen Wells Fargo’s position within the financial services industry.
Stock BuybackFinancial Disclosures
Wells Fargo Reports Strong Q4 and Annual Income
Positive
Jan 15, 2025
Wells Fargo reported a net income of $5.1 billion for the fourth quarter of 2024, with earnings of $1.43 per diluted share. The full-year net income for 2024 was $19.7 billion or $5.37 per diluted share. The company’s performance metrics showed improvement, with a reduction in noninterest expenses and a favorable change in net income and earnings per share compared to the previous year. The company also repurchased 57.8 million shares, valued at $4.0 billion, during the fourth quarter. Additionally, the financial results included discrete tax benefits and severance expenses related to prior period matters.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.