Wells Fargo & Company (NYSE:WFC) reported mixed results for the fourth quarter of 2022. The bank’s quarterly performance was impacted by operating losses related to litigation and customer remediation matters.
Revenues came in at $19.7 billion, reflecting a decline of 6% year-over-year and lagging analysts’ estimates by $19.9 billion. Lower revenues can be attributed to a considerable fall in income from mortgage banking and investment banking. This was partially offset by a 45% rise in net interest income (NII).
Meanwhile, the company posted diluted earnings of $0.67 per share, higher than the Street’s estimate of $0.60 per share. Also, the figure came in much lower than the year-ago figure of $1.38. Further, Wells Fargo increased its provision for credit losses to $957 million in the fourth quarter.
For the full year 2023, the company sees potential for a 10% increase in NII from 2022. Moreover, expenses (excluding operating losses) are expected to fall marginally year-over-year to $50.2 billion.
Is WFC a Buy Stock?
The company’s strategic growth efforts, including the shutdown of less profitable businesses, expense control initiatives, and settling legal issues, keep analysts optimistic about Wells Fargo.
The stock has a Strong Buy consensus rating based on 11 Buys and three Holds. The average price forecast for WFC stock is $53.31, implying an upside potential of 20.6% at current levels.