WFC Earnings: Wells Fargo Drops After Net Interest Income Declines

Shares of Wells Fargo (NYSE:WFC) declined in pre-market trading after the bank’s net interest income fell short of estimates. WFC’s net interest income (NII), a key measure of the income the bank generates from lending, declined by 9% year-over-year to $11.9 billion in the second quarter, below the consensus estimate of $12.12 billion. The bank attributed this drop to the impact of higher interest rates on funding costs.

WFC’s Q2 Results

The bank reported Q2 earnings of $1.33 per diluted share, compared to earnings of $1.25 per share in the same period last year. This beat analysts’ consensus estimate of $1.29 per share.

Wells Fargo’s revenues increased by 0.7% year-over-year to $20.7 billion, exceeding analysts’ expectations of $20.3 billion.

WFC’s Dividends and Stock Buyback

Wells Fargo repurchased $12 billion worth of stock in the first half of the year and plans to increase its third-quarter dividend by 14%. Currently, WFC offers a dividend yield of 2.3%, with a quarterly dividend of $0.35 per share as indicated by the graphic below.

Is WFC Stock a Good Buy Now?

Analysts remain cautiously optimistic about WFC stock, with a Moderate Buy consensus rating based on nine Buys and Holds each. Over the past year, WFC has surged by more than 40%, and the average WFC price target of $63.96 implies an upside potential of 6.3% from current levels. These analyst ratings are likely to change following WFC’s Q2 results today.