GET DAILY SIGNALSWells Fargo (WFC) Delivers +13% EPS Growth in Q3 Despite Revenue Shortfall
Key Takeaways
- Diluted earnings per share (EPS) rose 13% year over year to $1.87, slightly above the $1.85 consensus estimate.
- Revenue reached $21.87 billion, up 2% from a year earlier but below the roughly $22.31 billion analysts expected.
- Net interest income (NII), the money earned from lending and deposits, climbed 5% to $12.52 billion, with the net interest margin (NIM) holding steady at 2.43%.
- Average loans and average deposits both grew 11% year over year, reflecting broad-based balance sheet momentum.
- Return on tangible common equity (ROTCE), a key profitability measure, improved to 16.3% from 14.7% a year ago.
- The provision for credit losses rose to $1.03 billion from $681 million a year earlier, and the stock slipped about 1.6% after the release.
Putting the Quarter in Context
WFC reported third quarter 2026 results on October 13, 2026, for the period ended September 30, 2026. The report arrived as investors closely track the bank's efforts to lift profitability while managing a large balance sheet and regulatory constraints. Recent quarters have shown a recurring pattern: earnings per share beats, but revenue has missed consensus in three of the last four periods. With loans and deposits growing at a double-digit pace, this quarter's results offer an important read on whether balance sheet expansion is finally translating into top-line growth. The market's reaction also signals how much weight investors place on revenue momentum versus bottom-line performance. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
Breaking Down the Reported Results
WFC posted diluted EPS of $1.87 for the third quarter of 2026, up from $1.66 a year earlier and slightly ahead of the $1.85 FactSet consensus. Net income rose to $5.95 billion from $5.59 billion in the prior-year period.
Revenue came in at $21.87 billion, up from $21.43 billion a year ago but below the roughly $22.31 billion analysts anticipated. The shortfall reflected softer trading results and reduced fee income in some areas. Net interest income increased 5% to $12.52 billion, helped by higher loan and securities balances and fixed-rate asset repricing. The net interest margin was stable from the prior quarter at 2.43%, though down 18 basis points from a year earlier.
Noninterest income declined 1% to $9.4 billion, dragged lower by a 21% drop in trading gains and reduced lease income following the sale of the railcar leasing business. Investment advisory fees and brokerage commissions grew 12%, and investment banking fees showed strength, with M&A (mergers and acquisitions) revenue up 30%.
Average loans reached $1.03 trillion and average deposits $1.48 trillion, each up 11% year over year. Noninterest expense declined 1% to $13.7 billion as headcount fell 8% year over year. The provision for credit losses totaled $1.03 billion, up from $681 million a year earlier, though management described credit conditions as benign. ROTCE improved to 16.3%. From what I see, the balance sheet growth remains a standout feature here.
How the Market Reacted
Investors responded cautiously to the mixed report. WFC shares fell roughly 1.6% in early trading, dipping to around $80.79 in the pre-market before settling near $81.97. The decline reflected the revenue miss, which extended a familiar pattern of earnings beats paired with top-line shortfalls. The stock has fallen about 12% year to date and remains in the lower portion of its 52-week range, suggesting sentiment has been pressured by repeated revenue gaps despite clean credit and strong loan growth. The higher provision for credit losses also drew attention, though management characterized the overall credit environment as stable and within expectations.
What to Watch Going Forward
Management guided fourth quarter net interest income to roughly $13 billion, with the net interest margin expected to remain stable. This outlook matters because it will show whether rapid loan and deposit growth is finally converting into stronger revenue. The pace of balance sheet expansion has run ahead of original mid-single-digit expectations, with first-half loan growth near 12% year over year.
Expense discipline remains a focus. The company's full-year 2026 expense target of about $55.7 billion is intact, though revenue-related costs are running higher due to strong equity markets. Investors will watch whether efficiency savings continue to offset those pressures.
Capital returns are another key factor. WFC is targeting a Common Equity Tier 1 (CET1) capital ratio in the 10% to 10.5% range and raised its dividend 11% to $0.50 per share earlier this year. Buybacks remain a central part of the capital return story.
Finally, credit trends and the broader interest rate environment will shape the outlook. Management described credit as benign, but higher-for-longer rates and inflation remain potential headwinds for both consumers and commercial clients. How the bank navigates those conditions while sustaining loan growth and returns will be central to the next several quarters. I'm watching this closely as the numbers unfold.
Exploring AI Tools for Portfolio Insights
I often turn to Tickeron’s AI-powered tools when analyzing earnings reports like this one. Their AI Screener lets me quickly filter financial stocks by fundamentals, technical patterns, and performance metrics to spot comparable opportunities or confirm trends across the sector. It has become a useful part of my routine for staying efficient without sifting through endless data manually.
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
WFC in upward trend: price rose above 50-day moving average on November 02, 2026
WFC moved above its 50-day moving average on November 02, 2026 date and that indicates a change from a downward trend to an upward trend. In 26 of 38 similar past instances, the stock price increased further within the following month. The odds of a continued upward trend are 68%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where WFC's RSI Indicator exited the oversold zone, 18 of 27 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 67%.
The Momentum Indicator moved above the 0 level on November 02, 2026. You may want to consider a long position or call options on WFC as a result. In 48 of 73 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 66%.
The Moving Average Convergence Divergence (MACD) for WFC just turned positive on October 09, 2026. Looking at past instances where WFC's MACD turned positive, the stock continued to rise in 28 of 47 cases over the following month. The odds of a continued upward trend are 60%.
Following a +2.60% 3-day Advance, the price is estimated to grow further. Considering data from situations where WFC advanced for three days, in 202 of 331 cases, the price rose further within the following month. The odds of a continued upward trend are 61%.
The Aroon Indicator entered an Uptrend today. In 149 of 269 cases where WFC Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 55%.
Bearish Trend Analysis
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 4 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where WFC declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 58%.
WFC broke above its upper Bollinger Band on November 02, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is 2 (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is 19 (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 21, placing this stock better than average.
The Tickeron Price Growth Rating for this company is 47 (best 1 - 100 worst), indicating steady price growth. WFC’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Seasonality Score of 50 (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron PE Growth Rating for this company is 65 (best 1 - 100 worst), pointing to average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of 66 (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.569) is normal, around the industry mean (1.507). P/E Ratio (12.289) is within average values for comparable stocks, (11.753). Projected Growth (PEG Ratio) (1.264) is also within normal values, averaging (2.139). Dividend Yield (0.023) settles around the average of (0.035) among similar stocks. P/S Ratio (3.144) is also within normal values, averaging (3.867).
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