QS Research · Michael Burry's Scion Capital analyst template · 2006
WELLS FARGO & COMPANY/MN (WFC)
As of 2026-11-08 · 13/15 boxes filled from SEC filings and market data
Conclusion: SHORT
Conviction high · base case -30% · downside -43% · upside +0%
The market is capitalizing TTM net income of $21.98B as the run-rate; at today's 11.5x P/E that is about $84.2/share, only +0.3%. On the six-year cycle average of $15.34B the same multiple gives $58.8/share, -30%, and even the ex-trough FY2021-FY2025 average of $18.05B gives $69.2, -17.6%. WFC is operationally better than FY2020 (asset cap lifted, headcount down, large buybacks), but CET1 has fallen to 10.0%, Q3 provision rose 51% YoY, revenue missed, and EPS was helped by discrete tax benefits, so the TTM earnings base looks peak-ish rather than durable. The stock is a short: normalized value is below the price, the upside case is essentially flat, and capital and credit provide catalysts.
Key numbers
- Share price: $83.94
- Market cap: $251.98B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $87.23B
- P/E (TTM): 11.5x
- Price / book: 1.59x
The 15 boxes
- ✓ 1. Long-form business notes
Wells Fargo is a $2.1 trillion-asset U.S. bank holding company (fourth largest at December 31, 2025) run through four reportable segments that are unchanged from FY2020 to FY2025: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth and Investment Management. Between the FY2020 and FY2025 10-Ks the balance sheet grew modestly (assets ~$1.9T to ~$2.1T, loans $887.6B to $986.2B, deposits $1.4T both years) while earnings swung hard across the cycle: pre-tax income $2.50B in FY2020 versus $25.20B in FY2025, and net income to common $1.79B versus $20.29B. The change in the business is less in segments than in headcount (268,531 to ~205,000 active employees), share count (4,134.2M to 3,242.3M diluted) and an expanded description of capital markets, wealth/brokerage and nonbank competition. Normalized valuation should sit on the mid-cycle earnings and equity levels shown in the XBRL series, not on the FY2020 trough or the FY2025 peak.
- ✓ 2. Competitive advantage
The sources do not establish a durable competitive advantage for WFC. The 10-K describes a highly competitive industry with banks, nonbanks, private credit and fintech, and says some competitors have fewer regulatory constraints and lower cost structures; regulation is presented as a cost and constraint. S27 shows revenue of $74.26B in FY2020 and $83.70B in FY2025, but pre-tax income and net income to common were volatile across FY2020-FY2025, and total equity was $184.68B versus $181.12B. No source gives ROE, market share, deposit-cost or customer-retention data.
- ✓ 3. 10-Q takeaways
The Q3 2026 report set (earnings release Oct 13, 2026; 10-Q dated Oct 28, 2026) shows revenue of $21,870M, up 2% YoY, net income of $5,951M and diluted EPS of $1.87. Net interest income rose 5% but NIM fell to 2.43% from 2.61% a year earlier, and the credit provision rose to $1,029M from $681M. CET1 was 10.0% and Wells Fargo repurchased $2.5B of stock in Q3 2026; the release gives no numeric guidance, and the 10-Q incorporates risk factors by reference with no supplied diff.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ✓ 11. Impression of the shareholder letter
Filled; members read this box.
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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