TLDR:
- Wells Fargo’s Q3 2024 earnings beat estimates but showed year-over-year declines
- Stock price has risen over 50% in past 12 months despite declining financials
- Analysts have mixed views, with some upgrading price targets while others remain cautious
- Net interest income declined 11% year-over-year in Q3
- Wells Fargo revised full-year 2024 NII guidance to a 9% decrease
Wells Fargo, one of the largest banks in the United States, recently released its third-quarter financial results for 2024, revealing a complex picture of the company’s performance. While the bank beat earnings estimates, posting $1.42 per share against an expected $1.28, it also showed some concerning trends that have left analysts and investors with mixed perspectives on its future prospects.
The bank reported net income of $5.114 billion for the quarter, marking a decrease from the $5.767 billion recorded in the same period last year.
This decline in profitability comes despite the fact that Wells Fargo’s stock price has surged by more than 50% over the past 12 months, raising questions about the sustainability of its current valuation.

One of the key metrics drawing attention is Wells Fargo’s net interest income (NII), which saw an 11% year-over-year decrease to $11.69 billion in the third quarter. This decline in NII, a crucial measure of the bank’s lending business profits, has prompted the company to revise its full-year 2024 NII guidance. Wells Fargo now projects a decrease of approximately 9% for the year, aligning with consensus estimates but highlighting ongoing challenges in its core business.
The bank’s total revenue for Q3 2024 also showed a slight contraction, coming in at $20.366 billion compared to $20.857 billion in the year-earlier quarter. Additionally, average loans fell from $943.2 billion to $910.3 billion year-over-year, indicating a potential slowdown in lending activity.
Despite these declining figures, some analysts remain optimistic about Wells Fargo’s prospects. Phillip Securities recently upgraded the bank’s stock rating from Neutral to Accumulate and raised its price target to $65.00.
This upgrade was based on adjusted forecasts for fiscal year 2024 earnings, with expectations of increased investment banking revenue and reductions in expenses and provisions.
Other financial institutions, including Citi, Piper Sandler, Baird, and Evercore ISI, have also raised their price targets for Wells Fargo following the earnings release. Barclays made a significant adjustment, increasing its target to $75 and citing strong earnings per share performance as the rationale.
However, not all analysts share this bullish outlook. JPMorgan maintained a neutral stance, highlighting the significant drop in the bank’s net interest income as a cause for concern. The mixed analyst reactions reflect the complex nature of Wells Fargo’s current financial position and future outlook.
In terms of shareholder returns, Wells Fargo completed $3.5 billion in stock repurchases during Q3 and announced a 14% dividend increase. The company has maintained dividend payments for 54 consecutive years, demonstrating a long-standing commitment to returning value to shareholders.
Looking ahead, Wells Fargo faces both opportunities and challenges. The bank’s strong credit performance suggests a more stable credit environment for 2025, which could provide a foundation for future growth.
However, the declining NII and average loan figures indicate that the bank may need to navigate a changing financial landscape carefully.
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