Wells Fargo comes up short on revenue as it sets new profit target
By Jules Rimmer
Although Wells Fargo Chairman and CEO Charlie Scharf declared himself "proud of these results," the fourth-quarter earnings release from America's third largest bank by market capitalization underwhelmed the market.
Adjusted earnings, after stripping out 14 cents per share of severance costs, of $1.76 beat the FactSet consensus of $1.66, the bank said on Wednesday.
The bank's (WFC) fourth-quarter revenue of $21.3 billion were fractionally below the $21.6 billion consensus forecast but Scharf was upbeat about prospects in 2026 noting that the removal of the "significant constraints" of asset-cap provisions by the Federal Reserve last June would enable Wells Fargo to grow its balance sheet more rapidly in future.
The bank managed to deliver its targeted return on tangible common equity of 14.5% and has set a target for 2028 of between 17% and 18%. Scharf announced that in 2025 the company's excess capital position had allowed it to buy back $18 billion of its own shares and increase its dividend payout per share by 13%.
For 2026, Wells Fargo projected net interest income of roughly $50 billion, again just modestly below the $50.3 billion forecast by analysts. Its operating expense estimate of $55.7 billion was in line.
Having enjoyed a powerful rally in 2025 during which Wells Fargo increased its share price by almost a third, 2026 has proven more difficult for the bank so far and its stock is under water at this stage.
In premarket trading Wednesday Wells Fargo shares were trading just over 1% lower at $92.22.
The analyst community is fairly upbeat on prospects, however, with just one sell rating among the thirty or so analysts submitting recommendations to FactSet and a mean target price around $102, some 10% above present levels.
-Jules Rimmer
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01-14-26 0747ET
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