Wells Fargo (WFC) is one of the best S&P 500 stocks Wednesday after the financial services company beat profit expectations for its fourth quarter and issued a strong outlook for fiscal 2025.
In the quarter ending December 31, Well Fargo said its revenue slipped 0.5% year over year to $20.4 billion. Its earnings per share (EPS) increased 66.3% from the year-ago period to $1.43.
"Our solid performance this quarter caps a year of significant progress for Wells Fargo," said CEO Charlie Scharf in a statement. "Our earnings profile continues to improve, we are seeing the benefit from investments we are making to increase our growth and improve how we serve our customers and communities, we maintained a strong balance sheet, we returned approximately $25 billion of capital to shareholders, and we made significant progress on our risk and control work."
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.
The results were mixed compared with analysts' expectations. While Wells Fargo fell short of the $20.6 billion in revenue Wall Street anticipated, its earnings per share came in above the $1.35 per share analysts guided for, according to CNBC.
Included in the shareholder-friendly initiatives Wells Fargo undertook during the fourth quarter was the repurchase of roughly 57.8 million shares for approximately $4 billion, bringing its total repurchases in 2024 to approximately $20 billion. Stock buybacks are another way for corporations to boost value for shareholders.
For the full fiscal year, Wells Fargo said it expects to achieve net interest income growth of 1% to 3% over 2024's figure of $47.7 billion.
Wells Fargo's impressive EPS beat "along with a strong statement about continued growth and productivity gains lifted guidance more than expected," says Brian Mulberry, client portfolio manager at Zacks Investment Management. "This is evidence that the expense management project continues to pay dividends on the balance sheet, combined with better net interest income results boosting revenues by as much as 3% demonstrates that WFC is in a strong balance sheet position."
Is Wells Fargo stock a buy, sell or hold?
Wells Fargo has outperformed the broader market over the past 12 months, up 60% on a total return basis (price change plus dividends) vs the S&P 500's 24% gain. Unsurprisingly, Wall Street remains bullish on the financial stock.
According to S&P Global Market Intelligence, the average analyst target price for WFC stock is $77.30, representing implied upside of nearly 3% to current levels. Additionally, the consensus recommendation is a Buy.
Financial services firm BofA Securities is one of the more bullish outfits on the large-cap stock, calling it a "top pick" in the banking industry, along with a Buy rating and $84 price target.
"We remain bullish on bank stocks and expect the group to build on 2024 gains and outperform the S&P," wrote BofA Securities analyst Ebrahim Poonawala in a January 7 note, adding that the outperformance would be driven by several factors, including solid earnings-per-share growth, discounted valuation and increased ownership.
Related Content
-
Reasons to Consider Taking Another Look at GoldThe cycle of excessive borrowing to finance government expenditures, grants and aid of all kinds beyond taxable GDP and productivity might not end well.
-
How Trump’s Tariffs Could Impact Your Grocery BillTariffs at the checkout: Preparing for higher grocery bills and how to manage them.
-
Six Steps to Simplify Your Estate for Your HeirsA simplified estate strategy will expedite the settlement of your estate after you're gone, lower audit risk, reduce costs and cut your beneficiaries' stress.
-
Three Actions to Protect Wealth Transfer Amid Tax UncertaintyHow should families plan to pass on their wealth amid ongoing uncertainty over estate taxes? Even if TCJA provisions are extended, they might still be temporary.
-
Business Owners: How to Calculate Your Wealth Gap in Five MinutesHow much would you need from the sale of your business to retire without sacrificing your lifestyle? This simple calculation will give you an idea.
-
Stock Market Today: Dow Adds 485 Points After Trump's Tariff DelayThe White House said it will postpone tariffs on automotive imports from Canada and Mexico for one month.
-
10 Ways to Refine Your Financial Plan for a More Secure FutureSignificant benefits throughout the rest of the year can be had if you take some time now to revisit your financial plan and adjust accordingly.
-
The Most Important Number for a Business Owner Considering a SaleCompany owners hoping to sell and stop working won't know whether an offer on their business is good enough unless they know their 'wealth gap.'Evan
-
Stock Market Today: Dow Drops 670 Points on Trade War EffectA prodigious rally by the battered leader of the AI revolution typified an increasingly volatile picture for investors, traders and speculators.
-
Dividing an Estate? Five Ways to Create TransparencyLetting your children know your intentions while you're still around to explain your reasoning, and while you can make adjustments, can limit discontent later.
