Wells Fargo Shares Rebound After Second-Quarter Earnings Report

Shares of Wells Fargo & Co (NYSE: WFC) recovered slightly during early trading on Monday, bouncing back from a decline on Friday following the release of the second-quarter results. Despite an exciting earnings season, analysts noted some key takeaways from the report. The bank reported second-quarter earnings of $1.33 per share, surpassing the consensus estimate, with core earnings in line with expectations.

Analysts highlighted a mix deterioration in the quarter, with more low-margin fee revenue and less high-margin net interest income. The lower net interest income guidance for 2024, driven by changes in wealth management deposits, was a surprise to the market. RBC Capital Markets noted that while the overall performance exceeded estimates, the 2024 guidance fell short of expectations, leading to revisions in earnings estimates for the coming years.

Piper Sandler expressed optimism that the market may have overreacted to the guidance revisions, suggesting that the underlying changes were not as severe as initially perceived. On the other hand, Oppenheimer highlighted the company’s resilience within the challenging interest rate environment and anticipated positive revisions in guidance. Despite the concerns raised, Wells Fargo’s shares showed resilience, rising by 2.03% to $57.69 at the time of publication on Monday.