| Snowflake Score | |
|---|---|
| Valuation | 2/6 |
| Future Growth | 0/6 |
| Past Performance | 4/6 |
| Financial Health | 6/6 |
| Dividends | 3/6 |
WFC Overview
Wells Fargo & Company (NYSE: WFC) is a leading financial services company that has approximately $1.9 trillion in assets and proudly serves one in three U.S.
Wells Fargo Competitors
Price History & Performance
| Historical stock prices | |
|---|---|
| Current Share Price | US$45.85 |
| 52 Week High | US$20.76 |
| 52 Week Low | US$51.41 |
| Beta | 1.36 |
| 1 Month Change | -3.31% |
| 3 Month Change | 4.30% |
| 1 Year Change | 93.87% |
| 3 Year Change | -15.45% |
| 5 Year Change | 1.69% |
| Change since IPO | 1,521.22% |
Recent News & Updates
Wells Fargo: Limited New Sanction Risk
Wells Fargo was hit with a $250 million fine by the OCC for failing to remediate past account issues in a fast enough manner. The large financial had already warned that the regulatory deadlines would be difficult to meet while resolving the CFPB outstanding consent order. The stock is poised to rally as the new management team resolves the current regulatory issues over time and EPS soars from improved efficiency ratios and massive stock buybacks.
Is Wells Fargo Stock Undervalued Or Overvalued? How To View Its Valuation
Wells Fargo has generated great returns over the last year, but shares are still not expensive today. The outlook over the coming years is solid, thanks to cost-cutting efforts and a rapid buyback pace. Shares are trading close to the 52-week high today. Investors might want to wait for a better entry point.
This Estimate of Wells Fargo's (NYSE:WFC) Intrinsic Value will Give Investors a Better Basis for the Company
Today we will run through one way of estimating the intrinsic value of Wells Fargo & Company (NYSE:WFC) by using the Excess Return Model. This approach is used for finance firms where free cash flow is difficult to estimate. Our goal will be to give investors a reference point of the value of the company and help them weigh recent events.
Wells Fargo Marking Time Before Regulatory-Driven Growth Re-Acceleration
Wells Fargo posted complicated second quarter results; the bank posted a pre-provision beat even on the most conservative interpretation, as unusually large equity sales gains boosted the reported numbers. The near-term story in the core operations is the same here as for most banks - improving credit, but weak loan growth and spread leverage. Beyond the next few quarters, WFC has among the highest asset sensitivities and the lifting of the asset cap would likely drive a burst in balance sheet and earnings growth. Wells Fargo's return potential now looks more on par with other large banks, but a successful transition from regulatory remediation and turnaround to core growth could drive upside.
Shareholder Returns
| WFC | US Banks | US Market | |
|---|---|---|---|
| 7D | -0.4% | -1.6% | -1.8% |
| 1Y | 93.9% | 67.8% | 31.5% |
Return vs Industry: WFC exceeded the US Banks industry which returned 64.8% over the past year.
Return vs Market: WFC exceeded the US Market which returned 33% over the past year.
Price Volatility
| WFC volatility | |
|---|---|
| WFC Beta | 1.36 |
| Industry Beta | 1.37 |
| Market Beta | 1 |
Stable Share Price: WFC is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.
Volatility Over Time: WFC's weekly volatility (5%) has been stable over the past year.
About the Company
| Founded | Employees | CEO | Website |
|---|---|---|---|
| 1852 | 259,196 | Charlie Scharf | https://www.wellsfargo.com |
Wells Fargo & Company (NYSE: WFC) is a leading financial services company that has approximately $1.9 trillion in assets and proudly serves one in three U.S. households and more than 10% of all middle market companies in the U.S. We provide a diversified set of banking, investment and mortgage products and services, as well as consumer and commercial finance, through our four reportable operating segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth and Investment Management. Wells Fargo ranked No. 30 on Fortune’s 2020 rankings of America’s largest corporations.
Valuation
Is Wells Fargo undervalued compared to its fair value and its price relative to the market?
11.1%
Undervalued compared to fair value
Share Price vs. Fair Value
Below Fair Value: WFC ($45.85) is trading below our estimate of fair value ($51.59)
Significantly Below Fair Value: WFC is trading below fair value, but not by a significant amount.
Price To Earnings Ratio
PE vs Industry: WFC is poor value based on its PE Ratio (12.1x) compared to the US Banks industry average (10.6x).
PE vs Market: WFC is good value based on its PE Ratio (12.1x) compared to the US market (17.5x).
Price to Earnings Growth Ratio
PEG Ratio: WFC's earnings are forecast to decline next year, so we can't calculate its PEG ratio.
Price to Book Ratio
PB vs Industry: WFC's PB Ratio (1.1x) is in line with the US Banks industry average.
Future Growth
How is Wells Fargo forecast to perform in the next 1 to 3 years based on estimates from 21 analysts?
-4.1%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: WFC's earnings are forecast to decline over the next 3 years (-4.1% per year).
Earnings vs Market: WFC's earnings are forecast to decline over the next 3 years (-4.1% per year).
High Growth Earnings: WFC's earnings are forecast to decline over the next 3 years.
Revenue vs Market: WFC's revenue is expected to decline over the next 3 years (-1% per year).
High Growth Revenue: WFC's revenue is forecast to decline over the next 3 years (-1% per year).
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: WFC's Return on Equity is forecast to be low in 3 years time (9.4%).
Past Performance
How has Wells Fargo performed over the past 5 years?
-19.6%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: WFC has high quality earnings.
Growing Profit Margin: WFC's current net profit margins (20.4%) are higher than last year (4.3%).
Past Earnings Growth Analysis
Earnings Trend: WFC's earnings have declined by 19.6% per year over the past 5 years.
Accelerating Growth: WFC's earnings growth over the past year (470.8%) exceeds its 5-year average (-19.6% per year).
Earnings vs Industry: WFC earnings growth over the past year (470.8%) exceeded the Banks industry 36%.
Return on Equity
High ROE: WFC's Return on Equity (9.3%) is considered low.
Financial Health
How is Wells Fargo's financial position? (This company is analysed differently as a bank or financial institution)
Financial Position Analysis
Debt to Equity History and Analysis
Balance Sheet
Financial Institutions Analysis
Asset Level: WFC's Assets to Equity ratio (10.1x) is moderate.
Allowance for Bad Loans: WFC has a sufficient allowance for bad loans (206%).
Low Risk Liabilities: 82% of WFC's liabilities are made up of primarily low risk sources of funding.
Loan Level: WFC has an appropriate level of Loans to Assets ratio (43%).
Low Risk Deposits: WFC's Loans to Deposits ratio (58%) is appropriate.
Level of Bad Loans: WFC has an appropriate level of bad loans (0.9%).
Dividend
What is Wells Fargo current dividend yield, its reliability and sustainability?
0.87%
Current Dividend Yield
Dividend Yield vs Market
Notable Dividend: WFC's dividend (0.87%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.35%).
High Dividend: WFC's dividend (0.87%) is low compared to the top 25% of dividend payers in the US market (3.65%).
Stability and Growth of Payments
Stable Dividend: WFC's dividend payments have been volatile in the past 10 years.
Growing Dividend: WFC's dividend payments have increased over the past 10 years.
Current Payout to Shareholders
Dividend Coverage: With its low payout ratio (10.6%), WFC's dividend payments are thoroughly covered by earnings.
Future Payout to Shareholders
Future Dividend Coverage: WFC's dividends in 3 years are forecast to be well covered by earnings (29.8% payout ratio).
Next Steps
Management
How experienced are the management team and are they aligned to shareholders interests?
1.5yrs
Average management tenure
CEO
Charlie Scharf (56 yo)
1.92yrs
Tenure
US$20,392,046
Compensation
Mr. Charles W. Scharf, also known as Charlie, has been the Chief Executive Officer, President and Director of Wells Fargo & Company since October 21, 2019. Mr. Scharf serves as Director of Visa Internation...
CEO Compensation Analysis
Compensation vs Market: Charlie's total compensation ($USD20.39M) is above average for companies of similar size in the US market ($USD11.33M).
Compensation vs Earnings: Charlie's compensation has been consistent with company performance over the past year.
Leadership Team
Experienced Management: WFC's management team is not considered experienced ( 1.5 years average tenure), which suggests a new team.
Board Members
Experienced Board: WFC's board of directors are considered experienced (4.6 years average tenure).
Ownership
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.
Recent Insider Transactions
Ownership Breakdown
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
Top Shareholders
Company Information
Wells Fargo & Company's employee growth, exchange listings and data sources
Key Information
- Name: Wells Fargo & Company
- Ticker: WFC
- Exchange: NYSE
- Founded: 1852
- Industry: Diversified Banks
- Sector: Banks
- Market Cap: US$188.279b
- Shares outstanding: 4.11b
- Website: https://www.wellsfargo.com
Number of Employees
Location
- Wells Fargo & Company
- 420 Montgomery Street
- San Francisco
- California
- 94104
- United States
Listings
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2021/09/22 00:11 |
| End of Day Share Price | 2021/09/21 00:00 |
| Earnings | 2021/06/30 |
| Annual Earnings | 2020/12/31 |
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.