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Wells Fargo (WFC)
NYSE:WFC
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Wells Fargo
(NYSE:WFC)
78Outperform
Positive Factors
Financial Performance
4Q24 profit exceeded expectations on robust investment banking fees.
Regulatory Progress
Regulators are recognizing fulfilled obligations, indicating progress in addressing past issues.
Negative Factors
Asset Growth Limitations
Wells Fargo has limited capacity to grow assets due to an asset cap imposed by the Federal Reserve.
Interest Income Challenges
NII fell 6% YoY from lower rates and loan balances, as NIMs fell by 14bps YoY and loans dipped 3% YoY.
Regulatory Risks
Uncertainty around regulatory risks persists, with Wells Fargo under several active consent orders.
Wells Fargo (WFC) vs. S&P 500 (SPY)
Market Cap
$239.12B
Dividend Yield2.14%
Average Volume (3M)20.58M
Price to Earnings (P/E)13.3
Beta (1Y)1.04
Revenue Growth3.51%
EPS Growth16.51%
CountryUS
Employees215,367
SectorFinancial
Sector Strength88
IndustryBanks - Diversified
Share Statistics
EPS (TTM)1.39
Shares Outstanding3,254,182,400
10 Day Avg. Volume19,371,304
30 Day Avg. Volume20,581,339
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap2.26
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit6.94
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$77.77Price Target Upside7.34% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering13
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 Key Performance Indicators (KPIs)
Any
Average Loans by Segment
Shows the average loan amounts across various segments, indicating lending strength and potential risk exposure in different market areas.
Shows the average loan amounts across various segments, indicating lending strength and potential risk exposure in different market areas.
Data provided by:
Main Street Data
Main Street DataWells Fargo Financial Statement Overview
Summary
Wells Fargo shows strong financial performance with consistent revenue growth and profitability margins. The balance sheet is solid, but liquidity management and cash conversion efficiency need attention.Income Statement
Wells Fargo demonstrates strong profitability with a consistent revenue growth trend, evidenced by a 1.87% increase in TTM revenue compared to the annual report from 2024. Gross profit and EBIT margins are robust, at 100.38% and 64.35%, respectively, indicating effective cost management. However, the net profit margin of 25.18% suggests room for improvement in net efficiency. Notably, the company has maintained positive revenue growth over the years.85
Very Positive
Balance Sheet
The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.77, indicating moderate leverage. The equity ratio stands at 9.29%, showing a solid capital base relative to total assets. Return on equity is healthy at 11.04%, indicating efficient use of equity to generate profits. However, the decrease in cash and short-term investments over the TTM period highlights potential liquidity concerns.78
Positive
Cash Flow
Cash flow analysis reveals a mixed picture. The operating cash flow to net income ratio stands at 0.21, showing some room for improvement in cash conversion efficiency. The free cash flow to net income ratio is also 0.21, suggesting that while free cash flow is positive, cash generation relative to profit is modest. Positive free cash flow growth indicates ongoing operational cash generation capabilities.72
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 |
| 186.65B | 219.47B | 226.01B | 195.10B | 271.95B | Net Debt |
| -16.71B | -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
Positive
72.45
Price Trends
69.41
Positive
72.03
Positive
66.49
Positive
Market Momentum
1.35
Negative
60.12
Neutral
64.44
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WFC, the sentiment is Positive. The current price of 72.45 is above the 20-day moving average (MA) of 68.63, above the 50-day MA of 69.41, and above the 200-day MA of 66.49, indicating a bullish trend. The MACD of 1.35 indicates Negative momentum. The RSI at 60.12 is Neutral, neither overbought nor oversold. The STOCH value of 64.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
82 Outperform | $692.69B | 12.40 | 17.25% | 2.00% | 12.48% | 23.05% | |
80 Outperform | $198.30B | 10.44 | 10.30% | 5.78% | -1.91% | -6.79% | |
78 Outperform | $239.12B | 13.27 | 11.05% | 2.14% | 3.51% | 16.51% | |
73 Outperform | $307.60B | 12.28 | 9.46% | 2.44% | 8.23% | 16.15% | |
65 Neutral | $137.42B | 11.29 | 9.70% | 1.88% | 13.21% | -12.06% | |
64 Neutral | $129.75B | 11.07 | 6.33% | 3.09% | 2.97% | 87.82% | |
64 Neutral | $12.60B | 9.73 | 7.92% | 16985.68% | 12.21% | -5.55% |
* Financial Sector Average
Performance Comparison
WFC
Wells Fargo
72.45
12.63
21.11%
BAC
Bank of America
41.79
4.50
12.07%
C
Citigroup
71.45
10.13
16.52%
HSBC
HSBC Holdings
56.76
15.41
37.27%
JPM
JPMorgan Chase
253.08
58.86
30.31%
MUFG
Mitsubishi UFJ
12.53
2.55
25.55%
Wells Fargo Earnings Call Summary
Earnings Call Date:Apr 11, 2025
(Q1-2025)
| % Change Since: 15.44%|
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.Q1-2025 Updates
Positive Updates
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.
Negative Updates
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.
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.