Key Stats for $WFC Stock
- Price Change for $WFC stock: 7%
- Current Share Price: $85
- 52-Week High: $87
- $WFC Stock Price Target: $89
What Happened?
Wells Fargo (WFC) stock jumped over 7% today after the bank crushed third-quarter earnings expectations and raised its profitability target following the removal of its asset cap by regulators in June.
WFC stock posted one of its best single-day gains in years as investors finally see the bank shifting from defense to offense.
Wells Fargo earned $1.66 per share, beating the $1.55 estimate as net income hit $5.59 billion, up 9% year-over-year.
Wells now expects to achieve a 17% to 18% return on tangible common equity (ROTCE) over the medium term, up from its previous 15% goal, which the bank already hit in both the second and third quarters.
CEO Charlie Scharf was blunt about what’s changed: “Wells Fargo, without the regulatory constraints and with the changes we have made, is a significantly more attractive company than what we were several years ago and we believe this positions us for continued higher growth and returns.”
Investment banking fees surged 25% to a record $840 million for the quarter. Total assets topped $2 trillion for the first time ever, and loan growth hit its highest pace in over three years.
The bank advised on Union Pacific’s $85 billion acquisition of Norfolk Southern, the largest deal announced globally this year, and has advised on half of the top industrial M&A transactions in 2025.
Trading assets in Corporate and Investment Banking are up 50% since the end of 2023. Moreover, credit card new accounts grew 9% in the first nine months versus last year, with over 900,000 accounts added in the third quarter alone, up 49% from a year ago, while auto originations more than doubled.
Credit quality remains strong with net charge-offs declining to 0.26% of loans from 0.35% a year ago. The bank’s provision for credit losses shrank to $681 million from $1.07 billion last year, reflecting the resilient consumer environment.
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What the Market Is Telling Us About WFC Stock
The market’s reaction to WFC stock reflects years of pent-up frustration as Wells Fargo has been under regulatory scrutiny since the fake accounts scandal broke in 2016.
The $1.95 trillion asset cap imposed by the Federal Reserve in 2018 prevented the bank from growing its balance sheet, forcing it to watch competitors grab market share while it cleaned up its mess.
But now the shackles are off, and the bank has closed 13 regulatory consent orders since 2019, with just one remaining from 2018. More importantly, management has been quietly transforming the business while everyone focused on the regulatory drama.
Since 2019, Wells has cut headcount from 276,000 to 211,000, a 24% reduction, without outsourcing or business sales. That’s real efficiency.
The bank exited or sold businesses generating $5 billion in annual revenue but invested that capital into higher-return areas like investment banking, wealth management, and corporate banking. Revenue from those strategic investments has grown to nearly $5 billion since 2019.
The bank now sits on over $30 billion of excess capital above regulatory minimums with a CET1 ratio of 11%. Management plans to operate at 10% to 10.5% going forward, indicating significant capacity for buybacks.
Wells has already repurchased $6.1 billion in stock this quarter and expects a similar pace in Q4. Shares outstanding are down 24% since 2019.
Wells is targeting to become a top 5 U.S. investment bank and the leading consumer and small business bank.
The bank has already gained over 120 basis points of investment banking market share since 2022—more than any other bank. With the asset cap gone, Wells can finally compete for the balance sheet-intensive businesses that drive real profitability in banking.
Scharf emphasized the bank generates over $20 billion in after-tax earnings annually and pays only $6 billion in dividends, leaving $14 billion of capital to deploy for growth, manage volatility, and return to shareholders.
At a 15.2% ROTCE in Q3, Wells is finally approaching peer-level profitability. The path to 17%-18% looks achievable as the growth investments mature and the bank optimizes its massive excess capital position.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
