Wells Fargo: Unappealing Growth Setup

2026-01-19 04:00:40 ET

Wells Fargo ( WFC ) reported Q4 and full-year 2025 results on January 14, 2026 that unfortunately missed consensus estimates on revenue as well as net interest income. While the Wall Street bank generated strong underlying profitability nonetheless, Wells Fargo's full-year net interest income actually declined, mainly due to negative deposit migration trends. Although Wells Fargo is returning a lot of cash to shareholders, including a total of $18B in stock buybacks in FY 2025, I believe the bank’s capital return potential is fully priced in the bank’s current valuation. Shares of Wells Fargo are trading at a high price-to-book ratio, compared to Bank of America ( BAC ), which leaves little room for additional upside in 2026, in my opinion....

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