Wells Fargo (WFC) Up 3.8% Since Last Earnings Report: Can It Continue?

Core Viewpoint - Wells Fargo's recent earnings report indicates a mixed performance, with adjusted earnings per share surpassing estimates but revenues declining year over year, raising questions about future performance trends [2][5]. Financial Performance - The fourth-quarter 2024 adjusted earnings per share were $1.42, exceeding the Zacks Consensus Estimate of$1.34, and up from $1.29 in the prior-year quarter [2]. - Net income on a GAAP basis was$5.08 billion, reflecting a 47% increase from the prior-year quarter [3]. - For 2024, earnings per share were $5.37, surpassing the consensus estimate of$5.29 and rising from $4.83 in 2023 [4]. Revenue and Expenses - Quarterly total revenues were$20.38 billion, missing the Zacks Consensus Estimate of $20.55 billion, and decreased by 0.5$82.29 billion, also missing estimates and declining by 0.4% year over year [5]. - Non-interest income grew by 11% year over year to $8.54 billion, driven by improved venture capital results and higher asset-based fees [7]. - Non-interest expenses decreased by 12$13.9 billion, primarily due to lower FDIC assessments and severance expenses [8]. Net Interest Income - Net interest income (NII) was $11.83 billion, down 7$1.09 billion, down 15% from the prior-year quarter, indicating improved credit quality [11]. - The Tier 1 common equity ratio was 11.1%, down from 11.4% in the previous year [12]. Profitability and Share Repurchase - Return on assets improved to 1.05% from 0.72% year over year, and return on equity increased to 11.7% from 7.6% [13]. - In the reported quarter, Wells Fargo repurchased 57.8 million shares, totaling $4 billion [14]. Future Outlook - Wells Fargo expects NII in 2025 to be 1-3$54.2 billion [15]. - The company aims for a return on tangible common equity of 15% in 2025, up from 13.4% in 2024 [15]. - Recent estimates for the stock have been trending upward, indicating a positive outlook [16][18].