WFC - Wells Fargo: Q2 Earnings Suggest NII Drops Are Bottoming (Rating Upgrade)

2024-07-16 23:21:50 ET

Summary

• Wells Fargo's Q2 earnings showed a slight top-line and bottom-line beat, with an unchanged NII guidance that led to an initial market drop that recovered throughout the day.
• Net interest income has declined every quarter since Q4 22, but with Q2 drop rates decreasing and probabilities of rate cuts increasing, it suggests that this may be the bottom.
• Despite several risks and WFC being the underperformer among major banks over the past year, I have changed my rating from 'hold' to 'buy'

Around two months ago, I analyzed Wells Fargo & Company ( WFC ) and gave them a hold rating. After that analysis, the stock price hasn't had material movements, and the rally experienced from November to May, which appreciated up to 57.38% , has calmed down. ...

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