Street View: Wells Fargo's profit beat reinforces long-term growth case
WFC•Wells Fargo beat Q3 profit estimates, but lower-than-expected net interest income and revenue overshadowed the earnings beat. The median price target from 27 brokerages is $95.
1. Analysts see growth drivers
J.P. Morgan said controlled expenses, moderate loan growth and stable credit quality position Wells Fargo to benefit as its revenue and earnings mix evolves. RBC said the bank's growth playbook is gaining traction after the removal of its asset cap, citing broad-based revenue momentum, improving efficiency and balance-sheet growth.
2. Profitability outlook
Morgan Stanley said a stronger-than-expected Q4 net interest income outlook and stabilizing net interest margin support further profitability improvement. Jefferies cited stable net interest margin and growth in the markets business as supports for balance-sheet and earnings growth as Wells Fargo works toward its 17%-18% medium-term return-on-tangible-common-equity target.
