WFC - Wells Fargo: This Bull Run May Only Have Started
2024-03-08 06:32:50 ET
Summary
- Wells Fargo stock has returned over 30% in less than 5 months, outperforming the S&P 500. But the bull run has likely more room to go.
- The bank delivered strong Q4 and FY 2023 results, with high net interest income and total revenue. Profit-wise, Wells Fargo's full year pre-tax income was $21.6 billion, surging 38% YoY.
- Wells Fargo is projected to have a strong 2024, with lower expenses offsetting declining net interest income and an attractive capital distribution plan.
- WFC shares look undervalued trading at below 12x FWD earnings.
In November 2023, prior to the Q4 reporting cycle, I argued for a deep value thesis in Wells Fargo (WFC) stock. Since then, less than 5 months after my thesis was published, Wells Fargo stock has returned more than 30%, significantly outperforming the S&P 500. But there is potential for further growth in the bull run, in my opinion: Empowered by a robust fourth-quarter performance and a positive forecast for FY 2024, Wells Fargo stands on the brink of a bullish phase. This optimism is further fueled by the ongoing recovery in the economic cycle, effective cost management strategies, and the promise of a favorable capital distribution plan for the next fiscal year. Overall, I remain convinced that WFC shares are presently undervalued, with shares trading at less than 12 times forward earnings. In my opinion, the bull run may only have started....
Wells Fargo: This Bull Run May Only Have Started