AnalystConsensusTarget updated the narrative for WFC

Wells Fargo's analyst price target has increased by $1.69 to $93.13. Analysts cite the company's core earnings beat, stronger fee revenue, and improved profitability targets as reasons for the upward revision.

Analyst Commentary

Recent analyst activity reflects a mix of optimism surrounding Wells Fargo's performance, alongside some lingering caution regarding future execution and relative appeal. Many analysts have raised their price targets following notable third-quarter results, driven by improved fee revenues and upwardly revised profitability targets.

• Bullish analysts cite a stronger than expected core earnings beat in the latest quarter, supporting upward price target revisions.
• Improvements in fee generation and positive reserve releases have been highlighted as evidence of robust operational performance.
• Management's introduction of an ambitious new medium term return on tangible common equity target signals confidence in the bank's future profitability and growth trajectory.
• Rising earnings per share estimates, driven by both increased fee revenue and an accelerated pace of share buybacks, reinforce a positive outlook on valuation and shareholder returns.

• Bearish analysts maintain a cautious stance, pointing to low expectations around net interest income growth and limited near term upside despite recent earnings beats.
• Some express concern over the need for further execution to deliver on newly announced profitability targets, viewing these as ambitious and dependent on sustained performance improvements.
• Relative to peers, certain analysts continue to favor other major banks over Wells Fargo, citing perceived limitations in upside potential and market positioning.

What's in the News

• Treasury and Senate leaders are pushing to raise the FDIC insured deposit cap as high as $10 million, a move that could result in significant new costs for large banks such as Wells Fargo (The Wall Street Journal).
• The Federal Reserve is considering smaller capital increases for major U.S. banks, with projected hikes between 3% and 7%, which is much less than earlier proposals (Bloomberg).
• Major banks, including Wells Fargo, are competing for lead roles in the possible IPOs of Fannie Mae and Freddie Mac. These offerings could become some of the largest public offerings on record (The Wall Street Journal).
• Wells Fargo's strategic push into credit cards is creating benefits for partners like Cardlytics, as noted by research firm Citron (Citron Research via X).
• Banking industry groups have warned lawmakers about a perceived 'loophole' in new stablecoin regulations that could allow crypto exchanges to pay indirect interest to stablecoin holders, unlike traditional banks (Financial Times).

Valuation Changes

• Fair Value has increased modestly, moving from $91.44 to $93.13.
• Discount Rate has risen slightly, from 8.22% to 8.22%.
• Revenue Growth estimate has edged up, from 6.51% to 6.93%.
• Net Profit Margin is now higher, increasing from 22.78% to 23.56%.
• Future P/E has decreased, falling from 14.18x to 13.80x.