Wells Fargo & Co. (NYSE: WFC) announced its Q3 earnings with revenues of $19.5 billion, up 4% year-over-year and surpassing analysts’ estimates by $720 million. Adjusted earnings came in at $1.30 per share, exceeding Street estimates of $1.09 per share.
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However, the bank’s net income dropped 31% year-over-year to $3.53 billion in Q3.
Wells Fargo CEO Charlie Scharf commented, ” Our solid business performance in the third quarter was significantly impacted by $(2.0) billion, or $(0.45) per share, in operating losses related to litigation, customer remediation, and regulatory matters primarily related to a variety of historical matters.”
Scharf added that the bank remained bullish on its business opportunities, and “our higher operating margins and strong capital ratios have prepared us for a wide range of macro-economic scenarios.”
In Q3, WFC increased its dividend by 20% and its Common Equity Tier 1 (CET) ratio was 10.3%, 110 basis points above the current minimum regulatory requirement including buffers.
Is Wells Fargo a Good Stock to Buy?
Analysts are cautiously optimistic about WFC with a Moderate Buy consensus rating based on nine Buys, three Holds, and two Sells.
The average price forecast for WFC stock is $52.58 implying an upside potential of 24.1% at current levels.
