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.
Sign up for Kiplinger’s Free E-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
-
Americans Worry More About Going Broke in Retirement Than Dying, Study Shows. Here's What to Do.Inflation, taxes and Social Security are the three top concerns for retirees, according to the 2025 Allianz Annual Retirement Study
-
Doing This With Your 401(k) Could Cost You $18,000Your old 401(k) accounts may be slowly bleeding money — because the power of compounding can work against you, too.
-
Three Options for Retirees With Concentrated Stock PositionsIf a significant chunk of your portfolio is tied up in a single stock, you'll need to make sure it won't disrupt your retirement and legacy goals. Here's how.
-
Four Reasons It May Be Time to Shop for New InsuranceYou may be unhappy with your insurance for any number of reasons, so once you've decided to shop, what is appropriate (or inappropriate) timing?
-
Stock Market Today: Stocks Rise on Good VolatilityInvestors, traders and speculators continue to process the "known unknown" of global tariff-and-trade war negotiations.
-
Before You Invest Like a Politician, Consider This DilemmaAs apps that track congressional stock trading become more popular, investors need to take into consideration some caveats.
-
How to Put Together Your Personal Net Worth StatementNow that tax season is over for most of us, it's the perfect time to organize your assets and liabilities to assess your financial wellness.
-
Stock Market Today: Trump Retreats, Markets RejoiceStocks rally, yields soften, the dollar rises, and even beaten-down names enjoy the wages of potential trade peace.
-
Tesla Stock Pops as Elon Musk Promises DOGE Draw BackTesla reported a sharp drop in first-quarter earnings and sales, as the EV maker suffered a backlash to its CEO's political ambitions.
-
Bouncing Back: New Tunes for Millennials Trying to Make ItAdele's mournful melodies kick off this generation's financial playlist, but with the right plan, Millennials can finish strong.
