Wells Fargo Earnings: Shares Tumble 6% on Updated Expense Guidance; Trading Revenue Still Strong

Wide-moat-rated Wells Fargo reported second-quarter EPS of $1.33 per share which compares with $1.25 per share in the same quarter of the previous year. Shares of the bank tumbled around 6% on the news of the updated 2024 expense guidance, which was a slight disappointment given the importance of controlling expenses for the bank. Trading revenue came in quite strong at $1.4 billion, which was an near all-time high for the bank. The second-quarter numbers resulted in a return on tangible equity of 13.7%, still below the management’s medium-term target of 15%. We do not plan to materially change our $58 fair value estimate for Wells Fargo as we fully incorporate second-quarter results.