As the cycle plays out more fully, we think more certainty will emerge around these issues. Our sense is the market is still worried about the risks of higher rates and uncertainty around future profitability. We think Wells remains more undervalued than the “non-turnaround” peers, and while Citigroup C is also cheap, Wells seems further along in its journey. We do not expect an asset cap catalyst until 2024 at the earliest, with 2024 guidance being the next potential valuation mover. federal courts as a citizen of South Dakota). The firms primary subsidiary is Wells Fargo Bank, N.A., a national bank that designates its Sioux Falls, South Dakota, site as its main office (and therefore is treated by most U.S. While we’re not quite at the end of this cycle, Wells is not showing any signs of stress within its NII profile, and we think we’re getting close to some sort of equilibrium.Īs we update our forecasts, we do not plan to make a material change to our $61 per share fair value estimate and view the shares as undervalued. Wells Fargo became a coast-to-coast bank with the 2008 acquisition of Charlotte-based Wachovia. Deposits were up 1% during the quarter (better than peers), and deposit pricing trends were in line with our expectations as deposit betas approached 100%. Wells now expects growth of 16% year over year in 2023, up from 14% last quarter and 10% originally. The bank’s outlook for net interest income, or NII, also went up again. We had been hoping for something closer to $50 billion, but we think it may be tough to get rid of another $1.5 billion from here. The full-year 2024 outlook, coming next quarter, will be a key update in determining how much lower the bank’s core expense base can go. While higher severance charges are undoubtedly at play, the higher technology, advertising, and salary expenses may be more structural, and we plan to slightly increase our expense forecast as a result. The expense outlook, excluding operating losses, increased once again, this time to $51.5 billion (from $51 billion last quarter and $50.2 billion at the start of the year). Wells Fargo’s WFC third-quarter results were similar to last quarter’s. Wells Fargo’s shares were up 3 percent and JPMorgan’s up 1.5 percent, outpacing the overall market. residents only and subject to the following terms: /social.What We Thought of Wells Fargo’s Earnings A note about Social Media: Opinions, comments and actions taken on Social Media are those of the third party and do not necessarily reflect the views of the creator of this profile or of the firm. Insurance products are offered through nonbank insurance agency affiliates of Wells Fargo & Company and are underwritten by unaffiliated insurance companies. Wells Fargo experienced issues with some aspects of its banking system on Thursday night, according to the bank itself and hundreds of complaints on Downdetector, a platform that tracks service. Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC, Member SIPC, a registered broker-dealer and non-bank affiliate of Wells Fargo & Company. Investment products and services are offered through Wells Fargo Advisors. Products and services listed may not be available, or may have restrictions, depending on client country of residence. For parties residing outside of the U.S., this information is: (i) provided for informational purposes only, (ii) not and should not be construed in any manner as an offer to participate in any investment or to buy or sell any securities or related financial instruments, and (iii) not and should not be construed in any manner as a public offering of any financial services, securities or related financial instruments. Occasionally, a new browser window may open when you click on a link on our site. But they may also open at your request and show help text or another page of a site that is informative. Wells Fargo does not use them for advertising. Securities-related services may not be provided to individuals residing in any state not listed above. They are frequently used for advertising and open automatically whether or not you want to see them. This information is intended for use only by residents of (AZ, CA, CO, FL, GA, HI, ID, LA, MN, MS, MT, NC, NV, OH, OK, OR, SC, TN, TX, UT, WA, WI, WY). Subject to Investment Risks, Including Possible Loss of the Principal Amount Invested.Not a Deposit or Other Obligation of, or Guaranteed by, the Bank or Any Bank Affiliate.Not Insured by the FDIC or Any Federal Government Agency.
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