What Happened?
Shares of financial services giant Wells Fargo (NYSE: WFC) fell 4.9% in the afternoon session after the company reported mixed fourth-quarter results, where an earnings beat was overshadowed by a miss on revenue and weaker-than-expected profitability metrics.
The bank's adjusted earnings of $1.76 per share topped analyst estimates, but its revenue of $21.29 billion fell short of Wall Street's expectations. Investors also focused on key operational figures, as the bank’s net interest margin, a core measure of lending profitability, came in at 2.6%, below the 2.7% anticipated. Additionally, the company's efficiency ratio, which measures noninterest expenses as a percentage of revenue, was 64%, missing the forecast of 62.7% and indicating lower-than-expected efficiency. Overall, it was an underwhelming quarter with investors expecting more.
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What Is The Market Telling Us
Wells Fargo’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock gained 6.4% on the news that the company reported third-quarter 2025 results that topped Wall Street's revenue and profit expectations.
The company posted revenue of $21.44 billion, a 5.3% year-over-year increase that beat analyst estimates, while its earnings per share of $1.66 surpassed consensus forecasts by 7.4%. The positive results were tempered by a slight miss in net interest income, a key metric for bank profitability that measures the difference between what the bank earns on loans and pays on deposits. Despite some underlying weaknesses, the headline beats on revenue and earnings appeared to satisfy investors, sending the stock higher.
Wells Fargo is down 6.4% since the beginning of the year, but at $89.16 per share, it is still trading close to its 52-week high of $96.39 from January 2026. Investors who bought $1,000 worth of Wells Fargo’s shares 5 years ago would now be looking at an investment worth $2,565.
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