The 2026 outlook is hard to surprise, Citibank gives Wells Fargo Bank (WFC.US) a “neutral” rating

The Zhitong Finance App learned that Wells Fargo Bank (WFC.US) will release its financial report for the fourth quarter of 2025 on January 14. Citi expects its management to provide a full-year outlook at the earnings conference, and there is little room for upside surprises. Citi gave it a “neutral” rating, with a target price of $90.

Citibank's estimate of Wells Fargo's 2026 profit before core provision (PPNR) is largely in line with general market expectations, and the stock is still relatively crowded in investor positions.

The bank expects its revenue to grow by about 5%, driven by both expense income and net interest income: the increase in fee income will be mainly driven by wealth management, credit card and investment banking services after the asset cap is lifted; the increase in net interest income will benefit from a net interest spread expansion of about 10 basis points (which is expected to rise to about 2.70% by the end of 2026, which is generally in line with market consensus) and low to medium single-digit loan growth.

Citi expects core expenses (not including severance pay and operating losses) to increase by about 3% in 2026 (around 2% in 2025), benefiting from previous downsizing of personnel and further artificial intelligence applications, thereby improving the efficiency ratio to a low of around 60%. Given that the current valuation may reflect management's medium-term return on core tangible common equity (ROTCE) target of 17-18%, which is consistent with the 17% normalization assumption, and there is little room for upward in financial figures, the bank advises investors to continue to wait and see.

In terms of results for the fourth quarter of 2025, both Citibank and Market Consensus expect Wells Fargo's net interest income at the end of the 2025 period at the low end of its guidance range (US$124-12.5 billion).