VALUATION HIGHLIGHTS

1. Corp & Investment Banking constitutes 36% of the Trefis price estimate for Wells Fargo & Co.'s stock.
2. Community Banking constitutes 26% of the Trefis price estimate for Wells Fargo & Co.'s stock.
3. Commercial Banking constitutes 22% of the Trefis price estimate for Wells Fargo & Co.'s stock.

What has changed

Latest Earnings

Wells Fargo delivered a solid set of Q3 2025 revenues, with revenue rising 5.3% year over year to $21.44 billion, beating estimates. Earnings of $1.66 per share topped forecasts by 7.4%, though net interest income of $11.95 billion and a 2.6% net interest margin slightly missed expectations.

POTENTIAL UPSIDE & DOWNSIDE TO TREFIS PRICE

Below are key drivers of Wells Fargo's value that present opportunities for upside or downside to the current Trefis price estimate for Wells Fargo:

Community Banking

• Net Interest Income as % of Total Loans: We currently estimate that the net interest yield on Wells Fargo's community banking loans will decrease to 7.8% by the end of the Trefis forecast period. However, there could be a 1% upside to the Trefis price estimate if the yield figure reaches the 8.2%-level.
• Provisions as % of Mortgage Loans: We currently forecast that credit losses on Wells Fargo's outstanding home mortgage loans as a percentage of the total loans will normalize around 0.04%. However, if the credit losses as a percentage of loans settle around 0.25%, there could be a potential downside of 2% to the Trefis price estimate.

For additional details, select a driver above or select a division from the interactive Trefis split for Wells Fargo at the top of the page.

BUSINESS SUMMARY

Wells Fargo & Co. is a diversified financial services company headquartered in San Francisco, U.S. It is the third-largest bank in the U.S. by assets and the largest bank by market capitalization. Wells Fargo originates and services the largest number of mortgages in the country. It is also the second-largest bank in terms of deposits and debit cards in circulation.The bank offers financial products and services for corporates, governments, financial institutions, and private and business clients throughout the world. Services offered include banking, insurance, investments, mortgages, and consumer finance.

SOURCES OF VALUE

Mortgage Operations

Wells Fargo's mortgage division, which consists of home mortgage loans (does not include commercial real estate mortgage loans), mortgage servicing business, and mortgages held for sale, is the cornerstone of Wells Fargo's business model. Mortgages also serve as a relationship-building product, helping the company cross-sell other banking services.

KEY TRENDS

Higher prime loan interest rates will benefit Wells Fargo

The rate decreased to near zero in 2020 due to the Covid-19 crisis. However, the Federal Reserve increased the rates in 2022 and 2023. It has boosted the bank's net interest income, which is likely to remain elevated till the Fed's rate correction cycle is completed.

High core deposits and low cost of funding:

Wells Fargo has a net interest margin (interest earned on earning assets minus interest paid on funding sources as a percentage of interest-earning assets) of over 3% in 2024.High net interest margins at Wells Fargo are largely attributed to its large average core deposits (which include non-interest-bearing deposits, interest-bearing checking, savings certificates, market-rate and other savings, and certain foreign deposits). Nearly two-thirds of Wells Fargo's funding comes from deposits, much higher than the peer average of under 50%.