QS Research · Michael Burry's Scion Capital analyst template · 2006
WELLS FARGO & COMPANY/MN (WFC)
As of 2026-11-06 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case -14% · downside -31% · upside +21%
WFC is not priced as a deep-value bank: at $83.94 the $251.98B market cap is about 14.0x the FY2021-FY2025 normalized net income of $18.05B (~$6.01/share), above the BAC/USB/PNC 11.2x-12.0x range and close to JPM's 13.9x, while TTM net income is higher at $21.98B (12.5% ROE, 11.5x P/E, 1.43x P/B). A 12.0x normalized multiple gives ~$72/share, -14% from today, and the call rests on normalization: the base uses $18.05B averaged over FY2021-FY2025 versus $21.98B TTM, so today's price needs the 12.5% TTM ROE to hold rather than the 10.3% normalized ROE. The downside case of ~$57-$59, -30% to -32%, uses the six-year $15.34B average at 11.2x or 1.0x book, while the upside case of ~$102, +21%, assumes $21.98B TTM earnings persist at JPM's 13.9x. Risk/reward is against owning it, but not sufficient for a short against a de-risked franchise, heavy buybacks and low short interest; verdict is watch, not pass, because a better entry or a durable-return re-rating could emerge.
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: 1.43x
The 15 boxes
- ✓ 1. Long-form business notes
Wells Fargo is a $2.1 trillion-asset U.S. bank holding company (fourth largest by assets at 12/31/2025) running four reportable segments — Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth and Investment Management — the same four it reported at 12/31/2020. 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 flat at ~$1.4T; equity $185B to $181.1B) while headcount fell from 268,531 to ~205,000 and the product/competitive description shifted toward capital markets, fintech and digital assets. Earnings are deeply cyclical: net income went $1.79B (FY2020) to $20.82B (FY2021), $12.56B (FY2022), $17.98B (FY2023), $18.61B (FY2024) and $20.29B (FY2025) on revenue of $74-84B, so valuation must rest on normalized earnings and book value rather than any single year, with TTM shown beside it.
- ✓ 2. Competitive advantage
The sources support scale and a regulatory licence, not a durable pricing or cost advantage. Revenue moved only from $74.26B (FY2020) to $83.70B (FY2025) while pre-tax income swung from $2.50B to $29.56B and back to $25.20B, so the volatility sits below the revenue line, not in the franchise. ROE computed from XBRL net income and year-end equity is about 11% at best (FY2021 11.1%, FY2025 11.2%) and 1.0% in FY2020, a modest return that fits the 10-K's own admission that nonbank and fintech competitors have fewer regulatory constraints and some have lower cost structures. The clearest moat in the sources is the charter and supervisory framework, which the 10-K says protects depositors and the system 'and not necessarily investors'.
- ✓ 3. 10-Q takeaways
The only 10-Q material provided is the table of contents to the MD&A and the Item 1A cross-reference of WFC's quarterly report for the quarter ended 2026-09-30, filed 2026-10-28, so no sales, margin, inventory, cash, buyback or capital figures can be quoted from these sources. What the sources do establish is the structure of the quarterly discussion: summary financial data first, then earnings performance, balance sheet analysis, risk management and capital management. Risk factors are not restated as a separate update; Item 1A points back into the Financial Review's Risk Factors section.
- ✓ 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
- ○ 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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