Shares of banking giant Wells Fargo (WFC) gained in today’s trading as investors await its Q4 earnings results on January 15 before the market opens. Analysts are expecting earnings per share to come in at $1.35 on revenue of $20.58 billion. This equates to a 57% year-over-year increase in earnings. It’s worth noting that Wells Fargo has beaten earnings estimates for eight consecutive quarters. And there are reasons to believe that this losing streak could continue.
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In fact, Truist analyst John McDonald recently initiated coverage on Wells Fargo (WFC) with a Buy rating and an $82 price target due to the bank’s potential for franchise expansion and stronger returns after years of regulatory scrutiny. McDonald believes that big U.S. banks are well-positioned for double-digit earnings growth over the next two years, thanks to a cyclical recovery, capital flexibility, and opportunities for organic growth. Wells Fargo, in particular, is seen as nearing the final stages of an eight-year effort to resolve regulatory concerns, which should pave the way for higher profitability.
Separately, KBW also raised its price target on Wells Fargo to $81, while maintaining a Market Perform rating. The investment firm views the recent decline in bank stocks as a chance for investors to increase exposure ahead of potentially optimistic 2025 guidance. Analysts believe that despite recent headwinds, Wells Fargo and other large-cap banks remain attractive options for long-term investors as they prepare for a more favorable regulatory and economic landscape.
What Do Options Traders Anticipate?
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. Indeed, the at-the-money straddle suggests that options traders expect a 4.64% price move in either direction. This estimate is derived from the $71 strike price, with call options priced at $1.82 and put options at $1.48.
Is WFC Stock a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on WFC stock based on eight Buys, seven Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 56% rally in its share price over the past year, the average WFC price target of $79.60 per share implies 11.9% upside potential.
