CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We decrease our target price by $3 to $49, 9.3x our 2025 EPS estimate, below the three-year historic average of 11.0x given stagnant growth expectations. We decrease our 2024 EPS view by $0.19 to $4.93 and start 2025’s at $5.28. WFC posted Q4 adjusted EPS of $1.29 vs. $1.45 a year ago, $0.21 above consensus on revenue of $20.5 billion. It was a disappointing quarter as net interest income (NII) fell 5% Y/Y on 22 bps of net interest margin compression to 2.92%. Additionally, management indicated that it expects 7%-9% NII contraction in 2024. Although WFC has outperformed peers from a funding perspective, we think deposit pressures are finally catching up and we point to 12% Q/Q interest expense growth as evidence. Further pressure is coming from the bank’s CRE office portfolio, and the bank saw firm-wide net charge-offs more than double to 0.53%. On the positive side, WFC built up its CET1 ratio by 40 bps to 11.4% and should return more capital to shareholders in 2024 through buybacks than it did in 2023.