Wells Fargo stock target cut to $180 by Truist Securities

On Monday, Truist Securities adjusted their outlook on Wells Fargo (NYSE:WFC), with analyst Terry Tillman setting a new price target of $180, a decrease from the previous $285. Despite the reduction, the firm maintains a Buy rating on the bank’s shares. According to InvestingPro data, Wells Fargo, currently trading at $63.55 with a market cap of $207.5B, appears slightly overvalued based on its Fair Value analysis.

Tillman’s reassessment comes amid growing economic uncertainties, leading to projections that fall below the consensus for the years 2025-2026, particularly in professional services revenue. This revision is not reflective of Wells Fargo’s first-quarter performance for 2025. Tillman emphasized that the lowered estimates are based on the potential incremental impact of global macroeconomic factors on the bank’s services revenue and a slight reduction in the 2025 Remaining Performance Obligations (RPO) estimate, which is still within the guided range. InvestingPro data shows that 7 analysts have recently revised their earnings downward for the upcoming period, though the bank maintains a favorable analyst consensus recommendation of 1.87 (Buy).

The analyst cited previous management commentary from the fourth quarter call and discussions with industry contacts as reasons to believe that the bank’s cloud business and RPO are likely to remain relatively strong in the first quarter. Tillman expects Wells Fargo to deliver solid financial results for the first quarter, including stable dynamics in services revenue.

The new price target reflects a more conservative long-term discounted cash flow (DCF) analysis and a downward adjustment in sector valuations. Despite the lowered price target, Truist Securities continues to recommend Wells Fargo as a Buy, signaling confidence in the bank’s long-term prospects despite short-term headwinds.

In other recent news, Wells Fargo reported its first-quarter 2025 earnings with earnings per share (EPS) of $1.39, exceeding the anticipated $1.23. However, the bank’s revenue fell short, coming in at $20.15 billion compared to the expected $20.75 billion. Despite the earnings beat, the revenue miss might have contributed to a cautious market reaction. Wells Fargo’s net income was reported at $4.9 billion, and the company returned $4.8 billion to shareholders through dividends and buybacks. In terms of future expectations, Wells Fargo anticipates net interest income to rise by 1-3% in 2025, though they currently expect to hit the lower end of this range. The bank also projects modest loan growth in the latter half of the year. Additionally, CEO Charlie Sharp (OTC:SHCAY) emphasized ongoing transformation efforts, focusing on operational efficiency and strategic investments. These developments reflect Wells Fargo’s strategic direction amid a dynamic financial landscape.

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