Despite a recent pullback, Wells Fargo shares have seen significant gains in the fourth quarter of 2024, driven by loose monetary policy and the potential for regulatory relief under a Trump administration. The bank is expected to continue its upward trajectory in 2025.
Wells Fargo shares have been on a roll in the fourth quarter of 2024 despite their December pullback. With a key catalyst on the horizon, the momentum looks like it can continue in the new year. Year-to-date performance: up 43.6% Forward price-to-earnings multiple: 12.7 versus a five-year average of 11.
5 Our rating: Hold-equivalent 2 rating Our price target: $80 a share Wells Fargo's (WFC) year-to-date performance '24 look back Wells Fargo's run this year was driven by the Federal Reserve's loosening monetary policy, which began in September. Lower interest rates mean better net interest income (NII) for Wells Fargo because customers will be less likely to move their money into higher-yielding accounts. Donald Trump's presidential election victory in November propelled shares further on the odds of a more lenient regulatory environment for the financial sector. This includes fewer hurdles for mergers and acquisitions, a lower level of rainy-day capital that big banks must hold in reserves, and potentially even the removal of Wells Fargo's $1.95 trillion asset cap . Throughout the year, shares were sensitive to news on Wells Fargo's progress with its past regulatory misdeeds. The stock surged earlier this year after regulators lifted a key penalty tied to its 2016 fake accounts scandal. The day before that announcement, on Feb. 14, Wells Fargo stock closed at $48.53 a share. It hasn't closed below $50 since. The stock hit an all-time intraday high of over $78 on Nov. 26. As of Monday's late afternoon trading, shares have dropped 9.5% since then. '25 look ahead Jim Cramer said 2025 could be 'a much better year' for Wells Fargo, even after its 2024 performance exceeded expectations. Jim named the bank as a core holding . Lifting the asset cap was always a 'when, not if' situation. But the Street believes it might happen quicker under Trump than it would have otherwis
WELLS FARGO STOCK PERFORMANCE MONETARY POLICY REGULATION FUTURE PROSPECTS
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