We're upgrading our rating on Wells Fargo as the stock's pullback offers a nice entry point
Wells Fargo's third-quarter results were not perfect, but CEO Charlie Scharf's turnaround should bear more fruit ahead.
TL;DR
- Wells Fargo's third-quarter revenue of $21.9 billion missed estimates, but EPS of $1.87 beat expectations.
- The bank's net interest margin (NIM) stabilized at 2.43%, ending a streak of declines and beating expectations.
- Progress is being made in investment banking, with improved equity capital market share and a better U.S. M&A volume ranking.
- Consumer credit remains strong, with a falling charge-off ratio and historically low delinquencies.
- Analysts are upgrading Wells Fargo to a buy-equivalent rating, seeing the recent stock pullback as a buying opportunity.
- For Q4, the bank expects NII of about $13 billion and stable NIM.
- Consumer Banking and Lending revenue increased 5% year over year.
- Commercial Banking revenue advanced 6% year over year.
- Corporate and Investment Banking revenue increased 3% year over year.
- Wealth and Investment Management revenue increased 12% year over year.