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1. Company Snapshot

1.a. Company Description

Wells 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.

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1.b. Last Insights on WFC

Wells Fargo's recent performance was driven by strong Q3 2025 earnings, with net income rising to $5.6 billion and EPS up 17%. The removal of asset caps and resilient credit quality fueled growth, with net interest income up 2% and noninterest income growing 9.3%. Management targets higher ROTCE (17-18%) and plans to reduce CET1 ratio, enabling continued capital returns via dividends and share buybacks. A $5.5 billion quarterly buyback and solid balance sheet with $77B returns over five years drive rerating potential.

1.c. Company Highlights

2. Wells Fargo and Morgan Stanley's Earnings: A Tale of Two Banks

Wells Fargo's third-quarter 2025 results showed a significant improvement in net income and diluted earnings per share, which rose from a year ago and the second quarter. Revenue increased 5% year-over-year, driven by growth in net interest income and fee-based revenue, with investment banking fees up 25% to reach $1.73 actual EPS, surpassing estimates of $1.55. The company's revenue growth was accompanied by a raise in its common stock dividend and a doubling of its share repurchases from the second quarter, ending with over $30 billion in excess capital.

Publication Date: Oct -16

📋 Highlights
  • Revenue Growth:: 5% YoY increase driven by net interest income and fee-based revenue, including 25% higher investment banking fees.
  • Capital Returns:: Share buybacks doubled to $6.1B in Q3, with $30B+ excess capital and a raised dividend, reflecting strong capital flexibility.
  • Expense Optimization:: $3.6B reduction in expenses since 2019 from headcount cuts and lower professional services, supporting efficiency goals.
  • Credit and Capital Strength:: CET1 ratio at 11.1%, exceeding 10-10.5% target, with $20B annual after-tax earnings enabling robust risk management.
  • Business Transformation:: $5B annual revenue boost from core growth areas (wealth, investment banking) and non-core divestitures since 2019.

Business Mix Transformation

Wells Fargo has transformed its business mix by selling or scaling back non-core businesses, generating $5 billion in annual revenue. The company has invested in areas with higher growth and returns, resulting in a $5 billion increase in revenue from these businesses since 2019. As CEO Charlie Scharf mentioned, "they are optimizing capital and have multiple paths to achieve their goals," indicating a focus on organic growth opportunities.

Capital Management and Credit Quality

Wells Fargo's CET1 ratio has been at or above 11% for nine quarters and ended the third quarter with a ratio of 11.1%. The company generated $20 billion in after-tax earnings per year and pays approximately $6 billion annually in dividends, providing flexibility to grow its businesses, manage through economic volatility, and return capital to shareholders. Scharf stated that consumer performance is consistent, with strong credit results, stable deposits, and no real pockets of slowing.

Morgan Stanley's Performance

Morgan Stanley earned $5.6 billion in the third quarter, up 9% from a year ago, with diluted earnings per common share of $1.66. The strong performance reflects progress on priorities such as investing in businesses, executing efficiency initiatives, maintaining credit discipline, and returning excess capital to shareholders. The company's return on tangible common equity improved to 15.2% in the third quarter, and it aims for a medium-term target of 17% to 18%.

Valuation and Outlook

With a P/TBV ratio of 1.52 and a dividend yield of 1.91%, Wells Fargo's valuation appears reasonable. Analysts estimate next year's revenue growth at 4.8%. Considering the company's strong performance and guidance, it is likely that Wells Fargo will continue to outperform its peers. As Mike Santomassimo noted, "asset repricing and volume growth will drive NII," indicating a positive outlook for net interest income.

3. NewsRoom

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Wells Fargo Stock Hits Record High: Buy, Hold or Take Profits?

Dec -04

Source: zacks.com

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Market Today: Fed hopes lift stocks; AWS AI rollout; Prada-Versace deal

Dec -03

Source: gurufocus.com

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First Look: Airbus trims targets, AWS AI, AEO hikes outlook

Dec -03

Source: gurufocus.com

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Wells Fargo (WFC) Surpasses Market Returns: Some Facts Worth Knowing

Dec -02

Source:

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Wells Fargo to Present at the Goldman Sachs Financial Services Conference

Dec -02

Source: businesswire.com

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Brandes Investment Partners LP Trims Holdings in Wells Fargo & Company $WFC

Dec -02

Source: defenseworld.net

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How Amazon became America's biggest clothing seller

Dec -01

Source: cnbc.com

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Clarkston Capital Partners LLC Invests $212,000 in Wells Fargo & Company $WFC

Nov -28

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.25%)

6. Segments

Consumer Banking and Lending

Expected Growth: 7.4%

Wells Fargo's personal and small business customers segment will benefit from increasing demand for digital banking services, growth in online lending, and an expanding customer base, driving segment growth.

Corporate and Investment Banking

Expected Growth: 6.2%

Wells Fargo’s corporate banking services are expected to grow driven by increasing demand for digital payment solutions, expansion into new markets and growing need for risk management services among corporate clients.

Commercial Banking

Expected Growth: 8.5%

Increasing adoption of digital payment solutions, growing need for cash management services, and expansion of Wells Fargo’s commercial banking services in various industries, such as healthcare and technology.

Wealth and Investment Management

Expected Growth: 6.9%

Wealth and Investment Management at Wells Fargo is driven by increasing demand for wealth management services, growth in assets under management, and expanding presence in the private wealth management space

Corporate

Expected Growth: 7.4%

Wells Fargo’s corporate segment is driven by increasing adoption of digital banking, growth in commercial lending, and expansion of its investment banking business, supported by a strong brand reputation and a large customer base.

Reconciling Items

Expected Growth: 4.5%

Wells Fargo’s customer account reconciliation growth is driven by increasing adoption of digital banking services, rising demand for efficient account management, and the company’s strategic investments in technology and innovation.

7. Detailed Products

Consumer Banking

Provides checking and savings accounts, credit cards, personal loans, and mortgages to individual consumers.

Corporate Banking

Offers cash management, treasury management, and lending services to large corporations and institutions.

Commercial Banking

Provides financial solutions, including lending, treasury management, and risk management to small and medium-sized businesses.

Wealth and Investment Management

Offers investment products, brokerage services, and wealth management advice to individuals and institutions.

Mortgage Banking

Originates, sells, and services residential and commercial mortgages.

Home Lending

Provides mortgage loans, home equity loans, and home equity lines of credit to individual consumers.

Credit Cards

Issues credit cards to consumers and small businesses, offering rewards, cashback, and other benefits.

Auto Finance

Provides financing for new and used vehicles, as well as leasing options.

Student Lending

Offers private student loans and consolidation loans to students and parents.

Insurance

Provides insurance products, including life insurance, disability insurance, and long-term care insurance.

8. Wells Fargo & Company's Porter Forces

Forces Ranking

Threat Of Substitutes

Wells Fargo & Company faces moderate threat from substitutes due to the presence of digital payment systems and fintech companies, but the switching costs for customers are relatively high.

Bargaining Power Of Customers

Wells Fargo & Company has a large customer base, and individual customers have limited bargaining power, reducing the overall bargaining power of customers.

Bargaining Power Of Suppliers

Wells Fargo & Company has a diverse supplier base, and no single supplier has significant bargaining power, reducing the overall bargaining power of suppliers.

Threat Of New Entrants

The banking industry has high barriers to entry, including regulatory hurdles and capital requirements, making it difficult for new entrants to enter the market.

Intensity Of Rivalry

The banking industry is highly competitive, with many established players competing for market share, leading to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 54.16%
Debt Cost 9.82%
Equity Weight 45.84%
Equity Cost 9.82%
WACC 9.82%
Leverage 118.16%

11. Quality Control: Wells Fargo & Company passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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JPMorgan Chase

A-Score: 6.7/10

Value: 5.3

Growth: 5.2

Quality: 6.5

Yield: 5.0

Momentum: 8.5

Volatility: 9.7

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A-Score: 6.6/10

Value: 5.8

Growth: 7.7

Quality: 8.1

Yield: 4.0

Momentum: 7.0

Volatility: 7.0

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Citigroup

A-Score: 6.2/10

Value: 6.7

Growth: 4.7

Quality: 4.4

Yield: 5.0

Momentum: 8.5

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A-Score: 6.2/10

Value: 5.6

Growth: 5.3

Quality: 5.0

Yield: 5.0

Momentum: 7.5

Volatility: 8.7

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Wells Fargo

A-Score: 6.1/10

Value: 5.9

Growth: 5.2

Quality: 5.7

Yield: 4.0

Momentum: 8.0

Volatility: 8.0

1-Year Total Return ->

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Truist

A-Score: 5.8/10

Value: 4.8

Growth: 2.8

Quality: 5.5

Yield: 8.0

Momentum: 6.0

Volatility: 8.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

89.83$

Current Price

89.83$

Potential

-0.00%

Expected Cash-Flows