Wednesday, July 4, 2018

Wells Fargo Clawing Its Way Back

Wells Fargo (WFC) has shown that it can self-inflict wounds on a level that’s hard to match among the largest U.S. banks. While Wells Fargo is well and truly hated by quite a few people now (including investors), management has been working to rebuild the bank on multiple levels, including employee compensation/incentives, training, compliance, and customer relations. Rebuilding the brand and reputation is going to take a lot longer, and the bank still has serious regulatory headwinds, but the underlying operations haven’t been damaged all that badly.

Wells Fargo looks undervalued, but then so do others like Citigroup (C) and U.S. Bancorp (USB) (both with their own issues/challenges), as well as JPMorgan (JPM) and PNC (PNC). I won’t make a forceful argument that Wells Fargo is a must-own at today’s price, but the long-term potential total returns look pretty interesting and this remains a massive national platform with a very strong retail deposit base.

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Wells Fargo Clawing Its Way Back

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