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Wells Fargo & Company (WFC), headquartered in San Francisco, is one of the largest and most recognized banks in the U.S. It offers banking, insurance, investments, mortgage, and consumer/commercial finance through over 4,700 branches and various other channels. With an impressive market cap of $246.8 billion, it operates in four segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth and Investment Management.
Companies worth $200 billion or more are generally described as “mega-cap stocks,” and Wells Fargo fits right into that category. Its market cap exceeds this threshold, reflecting its substantial size, stability, and influence in the financial sector. The bank is a trusted and well-established brand, recognized for its extensive portfolio of financial products and services, broad customer reach, and robust financial stability.
However, there are challenges amid the positives. Wells Fargo’s shares are trading 6.5% below its 52-week high of $78.13, which it touched on Nov. 22. Moreover, shares of WFC are up 25.7% over the past three months, outperforming the broader Nasdaq Composite ($NASX), which has surged 15.5% over the same time frame.
Over the longer term, WFC has outpaced, with its stock up 48.4% on a YTD basis and 61.9% over the past 52 weeks. By contrast, the $NASX is up 31.5% in 2024 and 39.1% over the past year.
To confirm the bullish price trend, the stock has been on an uptrend, trading above its 50-day and 200-day moving averages since mid-October.
Over the past year, Wells Fargo has delivered strong price performance, driven by its expanded API portfolio for commercial banking, streamlined operations through the divestment of a servicing segment, and favorable market conditions fueled by Federal Reserve rate cuts. Additionally, improved capital ratios, lower provisions, and higher non-interest income have supported its positive momentum, alongside increased wealth management and investment banking activity as markets reach new highs.
On Oct. 11, WFC shares closed up more than 5% after reporting its Q3 results. Its EPS stood at $1.42, down 4.1% year over year. The company’s revenue was $20.37 billion, falling short of Wall Street forecasts of $20.38 billion.
It is worth noting that over the past 52 weeks, Wells Fargo has surpassed its top rival, JPMorgan Chase & Co. (JPM), with JPM stock surging 54.1%.
Despite Wells Fargo’s underperformance, analysts are cautiously optimistic about the stock’s future. The stock has a consensus rating of “Moderate Buy” from the 24 analysts covering it, and the stock currently trades above its mean price target of $69.74. Its Street-high target of $84 reflects a premium of 15% to current levels.
