Wells Fargo(WFC) MarketBeat·2024-10-22 11:31Core Viewpoint - Wells Fargo & Company reported a solid Q3 2024 earnings report, beating analyst EPS expectations by 14 cents, despite a 2.4% YoY revenue decline, which missed consensus estimates [1][6] Financial Performance - The company reported Q3 2024 EPS of 20.37 billion, just shy of the expected 11.7 billion, attributed to high funding costs and customer migrations to higher-yielding deposit products [2][3] - Non-interest expenses remained flat YoY, with total net loan charge-offs dropping by 15% YoY, indicating solid credit quality [3] Revenue Sources - Fee-based income rose 16% YoY during the first nine months of 2024, driven by strong performance in Wealth and Investment Management services and FICC trading fees [3] - The Corporate & Investment Banking segment, which generates 24% of total revenue, remained flat YoY, while FICC trading fees helped Markets revenue climb 6% YoY to 32.9 billion, primarily due to sluggish loan activity from high interest rates, impacting the Consumer Banking and Lending segment, which accounts for 45% of total revenue [4][5] - Home lending revenue rose 2% YoY, while auto lending fell sharply by 24% YoY as consumer spending softened [5] Future Outlook - The company adjusted its full-year net interest income decline guidance to around 9%, up from the previous forecast of 7% to 9% [5] - The interest rate cut cycle is expected to improve lending activity as consumers resume borrowing at lower financing costs [5] Stock Performance - Following the earnings report, Wells Fargo's stock experienced a 10% rally, allowing it to catch up to the performance of peer money center banks [1] - The stock trades at 12.57x forward earnings, with an average consensus price target of 71.00 [8]