Analysts Comment On Wells Fargo's Q2 Performance With Mixed Views: Downgrades And Price Target Adjustments

Some analysts lowered the estimate for Wells Fargo & Co WFC despite Q2 2023 results beat.

Last week, WFC reported Q2 EPS of $1.25, beating the consensus of $1.15, with revenues of $20.53 billion, up 21% Y/Y, above the consensus of $20.07 billion. 

The profit surged 57% to $4.9 billion as it earned more in interest payments from customers. 

For 2023, net interest income is expected to be ~14% higher than the FY22 level of $45.0 billion, up from prior guidance of ~10% higher.

BMO Capital Markets analyst James Fotheringham reduced the price target to $51 from $54 at a Market Perform rating.

The analyst lowered the estimate for core EPS by 2% to $4.75 (from $4.87) in 2024 and 3% to $5.09 (from $5.26) in 2025. 

The estimate revision reflects lower revenues and higher share counts, and increased headwinds from eventual rate cuts and new capital regulations.

On the other hand, the analyst raised the 2023 EPS estimate by 4% to $5.23 (from $5.04), led by higher-than-previously-modeled NII.

Also, Odeon Capital downgraded WFC to Hold from Buy with a price target of $43.75.

Moreover, Oppenheimer maintained the Perform rating but lowered the EPS estimate to $5.06 (from $5.18) for 2023 and $5.07 (from $5.14) for 2024. 

On the other hand, Citi Group raised the price target to $52 from $50 at a Buy rating, and Raymond James upped the target to $52 from $51 at a Strong Buy rating. 

Price Action: WFC shares are trading higher by 2.56% at $44.67 on the last check Monday.