Wells Fargo & Company (NYSE: WFC), the U.S. banking heavyweight and the nation’s largest mortgage lender, has once again edged past Wall Street expectations with its Q1 2025 earnings results. However, a dip in revenue and broader market underperformance leaves investors wondering: What’s next for this financial giant?
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📊 Earnings Beat—But Only Slightly
For the quarter ending March 2025, Wells Fargo posted adjusted earnings of $1.27 per share, narrowly beating the Zacks Consensus Estimate of $1.23. This marks a 3.25% earnings surprise, albeit a slight improvement over last year’s $1.26 per share.
This is not a one-off victory: Wells Fargo has now exceeded earnings estimates for four consecutive quarters, showcasing a consistent ability to outperform analyst projections.
Just last quarter, the bank posted an even stronger surprise, delivering $1.42 per share against an expected $1.34, a 5.97% beat.
💰 Revenue Falls Short of Expectations
While EPS came in strong, revenue told a different story. Wells Fargo reported $20.15 billion in revenue, which missed the Zacks estimate by 3.12% and was lower than the $20.86 billion posted a year ago. This marks a continued struggle to beat revenue estimates, with the bank only surpassing consensus revenue projections once in the past four quarters.
📉 Stock Performance & Market Comparison
Despite the earnings beat, Wells Fargo shares are down 10.2% year-to-date, mirroring the S&P 500’s broader downturn of -10.4%. The stock’s trajectory seems tethered not only to its own fundamentals but also to macroeconomic headwinds impacting the broader financial sector.
📈 What’s Next for WFC? Forecasts and Analyst Sentiment
With earnings now public, the spotlight shifts to what comes next. Analyst sentiment, as captured in earnings revisions, provides important clues. The trend ahead of the earnings release was mixed, and following the current results, any changes in analyst expectations will be closely watched.
Currently, Wells Fargo holds a Zacks Rank #3 (Hold)—signaling the stock is expected to perform in line with the market over the near term.
Looking forward:
- Next quarter EPS estimate: $1.46
- Next quarter revenue estimate: $21.06 billion
- Full-year EPS forecast: $5.83
- Full-year revenue forecast: $84.52 billion
These figures suggest modest optimism but underscore the need for better top-line growth to inspire bullish momentum.
🏦 Industry Outlook: Banking Stocks in Focus
Wells Fargo is part of the Zacks Financial – Investment Bank industry, which currently ranks in the top 36% out of more than 250 Zacks-tracked industries. Historically, the top 50% of industries outperform the bottom half by a 2-to-1 margin, providing some tailwind for WFC’s sector peers.
One such peer, The Charles Schwab Corporation (SCHW), is gearing up to report earnings for the same quarter. Schwab is expected to post:
- EPS of $0.99, up 33.8% YoY
- Revenue of $5.49 billion, up 15.8% YoY
With EPS estimates for Schwab recently nudged 0.5% higher, it could offer a contrasting performance benchmark for Wells Fargo.
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📌 Final Thoughts: Should Investors Hold, Buy, or Watch from the Sidelines?
Wells Fargo’s continued ability to beat earnings expectations speaks to strong internal cost controls and operational execution. However, the consistent revenue misses and year-to-date stock decline highlight vulnerabilities—possibly due to softer lending growth or macroeconomic pressure.
Investors may want to monitor changes in analyst forecasts, management’s guidance from the earnings call, and broader industry trends before making a move. For now, with a Zacks Rank #3 and mixed revisions, WFC appears to be a “wait-and-see” stock in 2025.