Asset Cap Removal Is a Material Positive For Wells; Increasing FVE to $69 From $65

Wells Fargo remains in the middle of a multiyear rebuild. The bank finally had positive news on the regulatory front as its asset cap was lifted in June 2025. Wells Fargo has years of expense-saving projects ahead of it as the bank attempts to get its efficiency ratio back under 60%. We also see a multiyear journey of repositioning and investing in the firm's existing franchises, including expanding its middle-market investment banking wallet share, investing in the cards franchise, and revitalizing a wealth segment that has lost advisors for years. These tasks take on increased importance for a bank that has been on defense for years after its fake accounts scandal broke in late 2016.