Wells Fargo's comeback is just getting started. Here's why I'm buying
Stephanie Link sees a buying opportunity in Wells Fargo as accelerating loan growth, improving profitability and the lifting of its asset cap fuel the bank's turnaround.
TL;DR
- The lifting of Wells Fargo's asset cap on June 3, 2025, enables the bank to invest, expand lending, and capture market share.
- Third-quarter average loan growth reached 11% year over year, driven by commercial and industrial lending, credit cards, and auto loans.
- Net interest income increased by 5% year over year to $12.5 billion in the third quarter, with a maintained full-year outlook of approximately $50 billion.
- The bank reported a return on tangible common equity of 16.3% in the third quarter, with potential to reach 17%-18%.
- Wells Fargo shares are trading around $83, about 15% below their 52-week high, trading at approximately 10.9 times earnings and 1.5 times book value.