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Is Wells Fargo Stock Underperforming the Nasdaq?

Wells Fargo & Company (WFC), headquartered in San Francisco, California, is a diversified financial services firm offering consumer banking, commercial lending, wealth management, and investment services. It operates branches and digital platforms worldwide, serving diverse customers from individuals to large corporations. The company has a market capitalization of $267.29 billion, which classifies it as a “mega-cap” stock. 

Wells Fargo’s shares had reached a 52-week high of $97.76 on Jan. 5, but are down 13.5% from that level. The company is facing some tepid sentiments at the moment. The stock has declined marginally over the past three months. However, the broader Nasdaq Composite ($NASX) index is also down marginally over the same period. 

 

www.barchart.com

Over the past 52 weeks, Wells Fargo’s stock has gained 9.5%, while the Nasdaq Composite index is up 18.6%. However, this year, the stock has declined 9.3%, while the broader index has dropped by 1.6%. The stock has traded below its 50-day moving average since mid-February and is currently near its 200-day moving average. 

www.barchart.com

On Jan. 14, Wells Fargo reported its fourth-quarter results for fiscal 2025. The company’s total revenue increased 4% year-over-year (YOY) to $21.29 billion, missing the analysts’ consensus estimate, leading to a 4.6% intraday drop in its stock. Its net interest income grew 4% from the prior-year period to $12.33 billion, driven by higher loan and investment securities balances, improved results in the Markets business, and fixed-rate asset repricing. 

Wells Fargo has a lot to look forward to. The company achieved its prior ROTCE target of 15% and has set a new medium-term target of 17%-18%. Last year, the Federal Reserve lifted a seven-year $1.95 trillion asset cap on the company, giving it a bit more freedom to make decisions. For the current quarter, Wall Street analysts expect Wells Fargo’s diluted EPS to grow 22.8% YOY to $1.56. 

We compare Wells Fargo’s performance with that of another financial giant, Bank of America Corporation (BAC), which has gained 13.4% over the past 52 weeks, but declined 8.4% year-to-date. Therefore, Wells Fargo has been the clear underperformer over these periods.

Wall Street analysts are moderately bullish on Wells Fargo’s stock. The stock has a consensus rating of “Moderate Buy” from the 27 analysts covering it. The mean price target of $101.86 implies a 20.4% upside from current levels. The Street-high price target of $113 indicates a 33.6% upside. 


On the date of publication, Anushka Dutta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

 

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