Wells Fargo’s third quarter results were met with a positive market reaction, with management crediting the momentum to both broad-based loan growth and renewed strength in fee-based revenues. CEO Charlie Scharf highlighted the impact of investments in core segments, pointing to a 25% increase in investment banking fees and accelerating growth in consumer lending. The lifting of the Federal Reserve’s asset cap played a pivotal role, allowing the company to expand its balance sheet for the first time in years. Scharf emphasized that these changes have made Wells Fargo “a significantly more attractive company,” with scale advantages in consumer banking, wealth management, and corporate banking.

Is now the time to buy WFC? Find out in our full research report (it’s free for active Edge members).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Wells Fargo’s Q3 Earnings Call

• Ken Usdin (Autonomous Research) asked about the timing of reaching the 17%-18% return target. CEO Charlie Scharf clarified it is a medium-term goal, not expected next year but also not a distant objective, and subject to capital deployment decisions.
• Ebrahim Poonawala (Bank of America) inquired about cost reduction opportunities and potential for inorganic growth. CFO Mike Santomassimo detailed broad-based efficiency projects, while Scharf noted organic initiatives are the main focus, though strategic acquisitions are considered if aligned with core businesses.
• John McDonald (Truist Securities) questioned the sustainability and sources of loan growth. Santomassimo highlighted broad-based expansion in cards and auto, with growth from both existing and new customers, and noted continued declines in mortgage and office loans.
• Erika Najarian (UBS) sought clarity on efficiency drivers and margin improvement in wealth management. Santomassimo pointed to increased banking and lending within wealth, advisor productivity, and ongoing rationalization of professional services and automation as margin levers.
• Betsy Graseck (Morgan Stanley) asked about the trajectory of trading activity and the normalization of compliance expenses. Santomassimo said further growth in markets is possible within risk appetite and that compliance costs remain elevated but are being reviewed for efficiency opportunities.

Catalysts in Upcoming Quarters

In the coming quarters, our team will monitor (1) how quickly Wells Fargo deploys excess capital to support loan and fee-based business growth, (2) the pace of efficiency gains from technology and headcount initiatives, and (3) continued progress in expanding digital banking, credit card, and wealth management penetration. The company’s ability to maintain strong credit quality and navigate regulatory changes will also be pivotal in achieving its medium-term return targets.

Wells Fargo currently trades at $86.04, up from $78.90 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).

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