Wells Fargo (WFC) Could Be 14% Undervalued Following Its Asset Cap Exit

Wells Fargo (WFC) has moved into a new phase after the Federal Reserve removed its asset cap in June 2025 and the bank closed its final consent order in early 2026, reporting 17.7% ROTCE in Q2 2026.

See our latest analysis for Wells Fargo.

At a share price of $84.72, Wells Fargo’s recent pattern shows short term share price returns softening, with a 7 day and 30 day share price decline, while a 90 day share price return of 9.29% and a 3 year total shareholder return of 117.57% point to stronger longer term momentum as investors weigh the end of regulatory constraints, fresh preferred dividends and recent fixed income issuance.

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Bulls see Wells Fargo as newly unshackled and priced below its estimated intrinsic value, while bears worry the recent run and fresh capital issuance already reflect the good news. Which case fits the numbers that follow?

Most Popular Narrative: 13.9% Undervalued

With Wells Fargo at $84.72 against a narrative fair value of $98.34, the current setup hinges on how much investors trust a lower discount rate and steady growth assumptions.

The removal of the asset cap and resolution of multiple regulatory orders unlocks Wells Fargo's ability to aggressively grow its balance sheet including deposits, loans, and trading assets after years of constraint, likely resulting in higher revenue and earnings growth over the coming quarters and years.

Read the complete narrative. Read the complete narrative.

Want to see what a larger balance sheet, tighter efficiency and firmer margins look like in numbers? The narrative leans on measured revenue, earnings and multiples assumptions that may surprise you.

Result: Fair Value of $98.34 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, Wells Fargo’s narrative could be tested if regulatory demands remain heavier than expected or if digital execution lags and customers shift more activity to fintech competitors.

Find out about the key risks to this Wells Fargo narrative.

Next Steps

With sentiment on Wells Fargo split between fresh opportunity and lingering questions, it may be helpful to act promptly and test the thesis against your own view using the 2 key rewards and 1 important warning sign

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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.

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