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    The Bull Case For Wells Fargo (WFC) Could Change Following Capital Structure Overhaul And Asset Cap Lift

    Simply Wall St·12/20/2025 19:20:05
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    • In December 2025, Wells Fargo & Company said it will redeem all of its Floating Rate Junior Subordinated Deferrable Interest Debentures due January 15, 2027 on January 15, 2026 at 100% of principal plus accrued interest, removing a covenant that had constrained redemptions of its 3.90% Fixed Rate Reset Non-Cumulative Perpetual Class A Preferred Stock, Series BB.
    • At the same time, Wells Fargo has been active in issuing new callable senior and subordinated unsecured notes across maturities out to 2040, reshaping its capital structure while the Federal Reserve’s removal of the asset cap opens the door to renewed balance sheet growth and a US$40.00 billion share repurchase plan.
    • With the asset cap lifted and a massive new buyback authorized, we’ll examine how this greater balance sheet flexibility reshapes Wells Fargo’s investment narrative.

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    Wells Fargo Investment Narrative Recap

    To own Wells Fargo, you need to believe its post asset cap phase can translate renewed balance sheet freedom into steady earnings and capital returns, while keeping regulatory, compliance, and technology execution risks contained. The latest debenture redemption and new bond issuance are meaningful for capital flexibility, but do not materially change the near term focus on how effectively Wells Fargo uses its US$40.00 billion buyback authorization without compromising balance sheet strength.

    The most relevant recent announcement here is the Federal Reserve’s decision to lift Wells Fargo’s asset cap, which directly underpins the bank’s stepped up issuance of callable senior and subordinated notes and its larger repurchase capacity. Together, these moves frame the key short term catalyst around how efficiently Wells Fargo can convert this new freedom into improved returns, while ongoing regulatory obligations and competitive pressures still sit in the background.

    But while capital flexibility has improved, investors should still be aware of how persistent regulatory and compliance demands could...

    Read the full narrative on Wells Fargo (it's free!)

    Wells Fargo's narrative projects $90.6 billion in revenue and $22.1 billion in earnings by 2028. This requires 5.3% yearly revenue growth and a $2.6 billion earnings increase from $19.5 billion today.

    Uncover how Wells Fargo's forecasts yield a $94.50 fair value, in line with its current price.

    Exploring Other Perspectives

    WFC 1-Year Stock Price Chart
    WFC 1-Year Stock Price Chart

    Five members of the Simply Wall St Community value Wells Fargo between US$74.70 and US$113.11, underscoring how widely opinions can differ. When you set those views against the asset cap removal and enlarged buyback, it raises important questions about how future balance sheet growth might filter through to long term returns.

    Explore 5 other fair value estimates on Wells Fargo - why the stock might be worth 20% less than the current price!

    Build Your Own Wells Fargo Narrative

    Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.