Wells Fargo (WFC): Assessing Valuation After Asset Cap Removal Unlocks Growth Potential

Wells Fargo (WFC) has been making headlines after the lifting of its asset cap in June 2025. This move unlocks new growth opportunities for the bank’s deposit and loan businesses in today’s friendlier interest rate environment.

See our latest analysis for Wells Fargo.

Momentum has been building for Wells Fargo, with optimism around the recent asset cap lift and leadership changes helping lift sentiment. The 22.3% year-to-date share price return reflects renewed confidence in its growth outlook, while the 102% three-year total shareholder return highlights impressive longer-term value creation.

If Wells Fargo's growth story has caught your attention, this could be the perfect moment to discover fast growing stocks with high insider ownership.

But with shares up over 22% this year and optimism running high, the key question for investors is whether Wells Fargo has further room to run, or if the market has already priced in its next chapter of growth.

Most Popular Narrative: 8.2% Undervalued

Wells Fargo’s last close at $85.85 sits below the most-followed narrative’s fair value estimate of $93.54. This suggests notable upside potential if its projections hold true. Beneath the headline number are bold expectations for growth and profitability, shaped by recent regulatory shifts and an optimistic medium-term outlook.

The removal of the asset cap and resolution of multiple regulatory orders unlocks Wells Fargo's ability to aggressively grow its balance sheet, including deposits, loans, and trading assets, after years of constraint. This may result in higher revenue and earnings growth over the coming quarters and years.

Read the complete narrative.

Curious what powers this bullish price target? The narrative points to major changes, including regulatory victories, new digital initiatives, and increasing competition. These factors have contributed to a set of numbers analysts rarely agree on. Which bold assumptions and moving parts justify this higher valuation? Dive in to see the surprising projections behind the headline figure.

Result: Fair Value of $93.54 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent regulatory costs and accelerating digital competition could still threaten Wells Fargo's ability to meet its ambitious growth and margin targets.

Find out about the key risks to this Wells Fargo narrative.

Another View: Multiples Tell a Less Optimistic Story

While our fair value estimate suggests Wells Fargo is undervalued, a look at its price-to-earnings ratio offers a contrasting perspective. Wells Fargo trades at 13.5 times earnings, which is higher than both its industry's average of 11.4 and its peers' 12.8. The fair ratio for Wells Fargo is estimated at 14.1, indicating that current valuations are already approaching where the market believes it should be. With little gap left, is the opportunity as big as it looks?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Wells Fargo Narrative

If you see things differently or want to challenge the numbers, it only takes a few minutes to dive into the details and shape your own perspective. Do it your way.

A great starting point for your Wells Fargo research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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