- Wells Fargo shares dipped 2% after Q3 revenue of $21.9 billion missed the LSEG consensus of $22.3 billion, while EPS of $1.87 beat the $1.85 consensus.
- Net interest margin stabilized at 2.43% quarter over quarter, ending four straight quarters of sequential declines and beating the 2.41% expectation.
- ROTCE rose to 16.3% from 15.2% a year earlier, above the roughly 16% expectation and closer to management's 17% to 18% target range.
- Efficiency ratio fell 200 basis points year over year to 63%, slightly worse than the 62.1% FactSet consensus.
- Non-interest income declined about 1% year over year, and Markets revenue within investment banking fell 1% on lower FICC activity.
- Equity capital market share rose 84 basis points to 3.9%, and the U.S. announced M&A volume ranking improved to No. 6 from No. 9 a year earlier.
- Consumer credit remained stable, with the charge-off ratio down from Q2 and year-ago levels, and corporate credit losses were 18 basis points in Q3.
Quotes
“We are upgrading our rating on Wells Fargo to buy-equivalent 1 from 2, while keeping our $95 price target.”
“The stabilization was a big deal because it ended four straight quarters of sequential declines, and the trend is expected to continue into the fourth quarter.”