Wells Fargo Earnings on Deck – What To Expect

Wells Fargo (NYSE:WFC) reports fourth quarter 2025 results tomorrow, before market open off the back of a strong year for the stock. The WFC stock price has added an impressive 34% over the past 12 months, raising expectations into the print.

The quarter tests whether the nation’s largest mortgage lender can sustain earnings momentum after the Federal Reserve’s asset cap removal earlier in 2025 opened a path to balance-sheet growth.

Consensus sits at $1.55 EPS and $21.16B revenue, both tracking above the bank’s implied fourth-quarter net interest income (NII) midpoint of approximately $12.45B, creating a setup where execution quality matters more than the absolute print.

The valuation context heading into the report is asymmetric. Shares have rallied 40.1% over the past year to $95.95, trading at 15.8x trailing earnings and within 2% of the $97.76 52-week high. The stock now sits above the consensus price target of $87.00, though bulls point to a 5.7% to 22.3% discount to intrinsic value depending on methodology. The market has re-rated Wells on the post-cap “offense” narrative, but the fourth quarter will determine whether that re-rating was premature or prescient.

What the result will clarify is whether Wells can deliver operating leverage as it shifts from regulatory cleanup to growth mode. Management raised medium-term return on tangible common equity (ROTCE) targets in the third quarter, but investors need evidence that NII stabilization, fee growth, and expense discipline can coexist. The stock’s reaction in recent quarters has been driven less by EPS beats and more by guidance credibility, particularly around NII trajectory and the quality of revenue mix.

Consensus Estimates

Consensus has drifted modestly higher into the print. The $1.55 EPS estimate reflects upward revisions of $0.02 over the past 30 days, with 12 analysts raising numbers and none cutting. The estimate momentum of +0.8% over the prior 30 days signals improving sentiment rather than deteriorating conviction. The revenue estimate of $21.16B sits 3.9% above the prior-year quarter’s $20.38B, but the more critical benchmark is management’s full-year 2025 NII guidance of roughly flat versus 2024’s $47.7B.

The setup creates limited room for upside surprise on headline revenue unless fee-based businesses (investment banking, wealth management, capital markets) materially exceed expectations. The estimate range is tight: $20.94B to $21.33B represents just 1.9% variance, suggesting analysts have converged on a narrow outcome distribution. That convergence shifts the burden of proof to execution quality and forward guidance rather than the absolute print.

Management Guidance and Commentary

“We raised our medium-term ROTCE target and expect to continue to make progress on our financial targets. The removal of the asset cap provides us with the ability to support all our customers’ financial needs and grow our business.”

Management’s October 2025 commentary following the third quarter marked a strategic inflection. After spending 2025 managing investor expectations lower on NII (cutting the full-year outlook from +1-3% growth to flat versus 2024’s $47.7B), Wells pivoted to framing the post-asset-cap opportunity. The raised ROTCE target signals confidence that balance-sheet growth, fee expansion, and capital deployment can drive returns even if NII remains range-bound.

The NII guidance trajectory through 2025 has been the primary driver of estimate revisions and stock reactions. Wells entered the year guiding to $48.7B NII (up 1-3% from 2024), walked that back to the low end of the range in April, then cut to flat versus 2024 ($47.7B) in July. By the third quarter, management’s implied fourth-quarter NII midpoint of approximately $12.45B suggested stabilization rather than deterioration.

Analyst Price Targets & Ratings

Wall Street maintains a constructive view, with 80% of analysts rating shares a Buy or Strong Buy. The consensus target of $100.88 implies 5.1% upside from current levels, though the stock’s recent rally to within 2% of 52-week highs has compressed the risk-adjusted return potential. Target ranges vary based on assumptions about post-cap balance sheet deployment and NII recovery timing.

Sector & Peer Comparison

Wells Fargo trades at a 11% premium to Bank of America on trailing P/E (15.8x vs. 13.9x) and a 31% premium to Citigroup (15.8x vs. 12.1x), but at a 6% premium on forward P/E relative to JPMorgan (13.6x vs. 12.8x). The valuation premium reflects Wells’ superior profit margin (26.6% vs. peer median of ~25%) and cleaner regulatory profile post-asset-cap removal. Wells’ 26.6% profit margin ranks second among large peers behind only JPMorgan’s 32.1%, underscoring the bank’s cost discipline from years of regulatory-driven restructuring.

Earnings Track Record

Wells Fargo has beaten EPS estimates in 18 consecutive quarters with a 100% beat rate and an average surprise of +14.3%, establishing credibility on earnings execution. The streak includes two quarters above +19% (Q4 2023 and Q3 2023) and recent beats ranging from +4.9% to +13.5% in 2025. The consistency suggests Wells has managed Street expectations conservatively or executed above internal plans, but the stock’s reaction pattern indicates beats alone do not drive sustained price appreciation.

Post-Earnings Price Movement History

Wells Fargo’s post-earnings price behavior shows minimal correlation between EPS surprise magnitude and next-day stock performance. The average move is -0.2% with a median of +0.3%, and the average move on beats is -0.5%, indicating that beating estimates does not reliably produce positive price reactions. The largest negative reaction came after Q3 2025’s +7.1% beat (-4.5% next day), while the largest positive reaction followed Q2 2025’s +13.5% beat (+2.5% next day).

Expected Move & Implied Volatility

The options market is pricing a ±3.2% move ($92.88 to $99.02 range) for Wells Fargo following the fourth quarter report, materially above the historical average next-day move of -0.2%. Implied volatility of approximately 24% sits roughly 2 points above 30-day historical volatility of 22%, indicating modest uncertainty premium. The elevated expected move relative to historical patterns likely reflects the stock’s proximity to 52-week highs creating asymmetric downside risk if guidance disappoints.

Expert Predictions & What to Watch

Key Outlook: Guidance Will Drive the Trade

The base case assumes Wells beats consensus EPS of $1.55 by $0.03-$0.08 (2-5%), landing in the $1.58-$1.63 range. This reflects the bank’s consistent execution and the positive estimate revisions over the past 30 days. Revenue will likely come in near the $21.16B consensus, with the key variable being mix: whether incremental dollars come from fee-based businesses or balance-sheet spread income.

Key Metrics to Watch

The setup heading into the fourth quarter is less about the quarterly print and more about the forward trajectory. Wells has established credibility on beating EPS estimates, but the stock’s 40.1% one-year rally has priced in a successful transition from regulatory cleanup to growth mode. The market now requires evidence that transition is underway, not just aspirational. NII stabilization, fee momentum, expense discipline, and constructive 2026 guidance are the four pillars that will determine whether Wells can sustain its valuation premium.