Wells Fargo Stock Falls Despite Q2 Beat: Buy, Sell or Hold?
Wells Fargo's reported $11.9 billion in net interest income came in well below the $12.1 billion analysts were expecting.
You are now subscribed
Your newsletter sign-up was successful
Want to add more newsletters?
Delivered daily
Kiplinger Today
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more delivered daily. Smart money moves start here.
Sent five days a week
Kiplinger A Step Ahead
Get practical help to make better financial decisions in your everyday life, from spending to savings on top deals.
Delivered daily
Kiplinger Closing Bell
Get today's biggest financial and investing headlines delivered to your inbox every day the U.S. stock market is open.
Sent twice a week
Kiplinger Adviser Intel
Financial pros across the country share best practices and fresh tactics to preserve and grow your wealth.
Delivered weekly
Kiplinger Tax Tips
Trim your federal and state tax bills with practical tax-planning and tax-cutting strategies.
Sent twice a week
Kiplinger Retirement Tips
Your twice-a-week guide to planning and enjoying a financially secure and richly rewarding retirement
Sent bimonthly.
Kiplinger Adviser Angle
Insights for advisers, wealth managers and other financial professionals.
Sent twice a week
Kiplinger Investing Weekly
Your twice-a-week roundup of promising stocks, funds, companies and industries you should consider, ones you should avoid, and why.
Sent weekly for six weeks
Kiplinger Invest for Retirement
Your step-by-step six-part series on how to invest for retirement, from devising a successful strategy to exactly which investments to choose.
Wells Fargo (WFC) stock is down more than 6% at the start of trading Friday after the banking giant beat analysts’ expectations on the top and bottom lines for its second quarter, but its net interest income, a key metric for banks, failed to meet expectations.
In the quarter ended June 30, Wells Fargo’s revenue increased 0.8% year-over-year to $20.7 billion despite a 9.4% year-over-year decline in net interest income to $11.9 billion. Its earnings per share (EPS) increased 6.4% to $1.33 from the year-ago period.
“Our efforts to transform Wells Fargo were reflected in our second quarter financial performance as diluted earnings per common share grew from both the first quarter and a year ago,” Wells Fargo CEO Charlie Scharf said in a statement.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Wells Fargo Q2 earnings report
The headline results beat analysts’ expectations. Wall Street was anticipating revenue of $20.3 billion and earnings of $1.29 per share, according to CNBC. However, the reported $11.9 billion in net interest income came in well below the $12.1 billion analysts were expecting.
“We continued to see growth in our fee-based revenue offsetting an expected decline in net interest income,” Scharf said. “The investments we have been making allowed us to take advantage of the market activity in the quarter with strong performance in investment advisory, trading, and investment banking fees.”
Wells Fargo also said it repurchased over $12 billion of common stock during the first half of the year and reiterated its expectation of a 14% dividend increase in the third quarter, which it first announced in late June following the release of the Federal Reserve’s stress test results. Stock buybacks can boost value for shareholders.
JP Morgan Chase (JPM) and Citigroup (C) reported earnings this morning as well, as the start of a busy earnings calendar for this season.
JP Morgan reported revenue of $51 billion and earnings of $4.40 per share, topping expectations of revenue of $49.9 billion and earnings of $4.19 per share. Citigroup also reported a beat with revenue of $20.1 billion and EPS of $1.52 versus expectations of revenue of $20.07 billion and earnings of $1.39 per share.
Is Wells Fargo stock a buy, sell or hold?
Wall Street is bullish on the bank stock. According to S&P Global Market Intelligence, the average analyst target price for WFC stock is $64.16, representing implied upside of more than 14% to current levels. Additionally, the consensus recommendation is a Buy.
Related Content
- The Best Financial Stocks to Buy
- Earnings Calendar and Analysis for This Week
- Analysts' Top S&P 500 Stocks to Buy Now
-
Money Questions Couples Should Ask Before Combining Finances or Planning a Future TogetherHonest financial conversations can reduce stress, strengthen trust and help couples align long-term goals.
-
Ask the Tax Editor: IRAsAsk the Editor In this week's Ask the Editor Q&A, Joy Taylor answers questions on IRAs
-
At-Fault States Where No-Fault Insurance Still AppliesThink you live in an at-fault car insurance state? These four still have some tricky no-fault insurance laws you should know about.
-
4 Pro Tips for Successfully Scaling the Medicare MountainAttempting to conquer Medicare without a plan is risky. The safest route requires a thorough understanding of your options and never leaves decisions to chance.
-
For More Flexible Giving, Consider Combining a Charitable Remainder Trust With a Donor-Advised FundIf a charitable remainder trust puts too many constraints on your family's charitable giving, consider combining it with a donor-advised fund for more control.
-
The Illinois 'Cliff Tax': A Single Dollar Could Cost Families Hundreds of ThousandsIllinois' estate tax "threshold" (rather than "exemption") can surprise families, but proactive planning can help preserve more for heirs and charitable causes.
-
AI Unwind Takes 2% Off the Nasdaq: Stock Market TodayMarkets are paying more and more attention to hyperscalers' plans to spend more and more money on artificial intelligence.
-
Big Change Coming to the Federal ReserveThe Lette A new chairman of the Federal Reserve has been named. What will this mean for the economy?
-
January CPI Report Shows Inflation Slowed. Here's What That Means for Rate CutsThe January CPI report came in lighter than expected. Here's what economists say that means for the Federal Reserve and interest rates.
-
These Thoughtful Retirement Planning Steps Help Protect the Life You Want in RetirementThis kind of planning focuses on the intentional design of your estate, philanthropy and long-term care protection.
-
Fixed Indexed Annuities and Bonds: The Perfect Match as Interest Rates Inch Lower?The prospect of more interest rate cuts has investors wondering how to enhance the bond portion of their portfolio. A fixed indexed annuity could be the answer.
