Wolfe Research on Wells Fargo (WFC): 'we expect shares to trade better than pre-market declines in today’s session'
Wolfe Research on Wells Fargo (NYSE: WFC): 'we expect shares to trade better than pre-market declines in today’s session'.
The analyst comments "WFC: WFC reported 2Q EPS of $2.00; adjusting for venture / other gains, core EPS was ~$1.80, handily beating WR / Cons. of $1.69 / $1.72. Versus our estimate, the beat was driven by higher NII (+$0.01) and better efficiency (+$0.07), as well as lower credit costs. See detailed EPS variance on pg.6. Bottom Line: While some of the underlying NII drivers were mixed, NIM was fairly resilient, expenses were well controlled, and credit performance was better. More importantly, management held the line on both FY NII guidance, as well as costs, highlighting the benefit of WFC’s more aggressive headcount actions. Given concerns that we could see management lower NII guidance and/or raise expense guidance, we expect shares to trade better than pre-market declines in today’s session, even if EPS revisions are more muted."