economy
Wells Fargo's asset cap removal has not been the silver bullet we expected. What to do next
When Wells Fargo broke free of the Fed's asset cap, investors had expected big things. Twelve months later, the stock is stuck in the penalty box.
TL;DR
- Wells Fargo's stock is underperforming despite the removal of the Federal Reserve's asset cap.
- Investors and Jim Cramer are disappointed with the bank's recent earnings and stagnant stock price.
- The bank's efficiency ratio remains higher than competitors like Citigroup, Bank of America, and Goldman Sachs.
- Wells Fargo has made progress in improving efficiency under CEO Charlie Scharf, reducing headcount and selling businesses.
- The bank is investing in its investment banking and capital markets businesses to diversify revenue.
- Goldman Sachs has outperformed Wells Fargo, partly due to its lead role in the SpaceX IPO.
- Jim Cramer is considering selling some of his Wells Fargo holdings due to underperformance and significant gains.
- Wells Fargo is scheduled to report second-quarter earnings on July 14.