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Investing.com - TD Cowen has reduced its price target on Wells Fargo (NYSE:WFC) to $82.00 from $83.00 while maintaining a Hold rating on the stock. According to InvestingPro data, Wells Fargo currently trades at a P/E ratio of 13.4, suggesting attractive valuation levels relative to its growth potential.
The adjustment follows Wells Fargo’s second-quarter 2025 earnings report, which showed core earnings per share exceeding expectations despite revenue falling short of both TD Cowen’s forecast and the broader market consensus.
TD Cowen characterized the earnings beat as "low quality," noting it was primarily driven by a lower tax rate rather than fundamental business strength.
The research firm specifically pointed to Wells Fargo’s downward revision of its net interest income (NII) guidance, with the bank citing lower markets-related NII as the primary factor for the reduction.
While acknowledging that the more than 5% sell-off in Wells Fargo shares appeared to be "a modest over-reaction" to the earnings report, TD Cowen maintained its Hold rating on the stock.
In other recent news, Wells Fargo & Company reported stronger-than-expected earnings for the second quarter of 2025, with earnings per share reaching $1.60, surpassing the forecasted $1.40. The company also exceeded revenue expectations, reporting $20.82 billion against a forecast of $20.76 billion. Despite these positive financial results, the company’s stock experienced a decline in pre-market trading. Wells Fargo has been focusing on strategic initiatives, including investing in new technology and AI capabilities, as well as planning to grow deposits and loans aggressively. The bank’s net income for the quarter was $5.5 billion, and its return on tangible common equity stood at 15%. Analysts from Truist Securities and RBC Capital Markets have shown interest in the company’s future growth prospects, particularly with the recent lifting of its asset cap, which provides more balance sheet flexibility. The management team is optimistic about leveraging these developments to drive growth in consumer and commercial banking while maintaining expense discipline.
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