Wells Fargo Share Price Forecast January 2022 – Time to Buy WFC?
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
Shares of American multinational financial services company Wells Fargo (NYSE: WFC) are in the green today after closing at $50.73 as of January 3rd (22:35 EST). After Wells Fargo’s phoney-accounts scandal came to light, the Federal Reserve placed the asset cap on it. This has cost Wells Fargo billions in profits over the years.
Wells Fargo – Technical Analysis
Wells Fargo’s financial statement indicates that the market cap is at $202.272 billion with total assets worth $1.955 trillion. Revenue for 2020 was at $82.13 billion with a profit margin of 4.02% compared to $105.41 billion with 2019.
Moving averages such as Exponential Moving Average (10)(48.76), Simple Moving Average (10)(48.35), Exponential Moving Average (20)(48.81), Simple Moving Average (20)(48.83) and Exponential Moving Average (30)(48.91) are indicating a buy action. Oscillators such as Relative Strength Index (14)(58.58), Stochastic %K (14, 3, 3)(58.85), Commodity Channel Index (20)(162.61), Average Directional Index (14)(11.84) and Awesome Oscillator(−0.40) are neutral.
68% of all retail investor accounts lose money when trading CFDs with this provider.
Recent Developments
In 2016, it was reported that Wells Fargo had opened millions of depository and credit card accounts without the consent of customers. As a result, regulatory authorities slapped Wells Fargo with billions in fines and banned former CEO John Stumpf. The Federal Reserve also imposed an asset cap in February 2018. This prevented Wells Fargo from growing its balance sheet ever since, a move that has also cost the bank billions in profits. The bank’s senior management is now made of an entirely new team, as wells as the bank’s 18-member operating committee. It has introduced several measures and made noticeable improvements to its regulatory infrastructure to ensure that a similar scandal cannot happen again.
According to a source at Bloomberg, the Federal Reserve has accepted Wells Fargo’s proposed overhaul plan for revamping its governance and risk management infrastructure. The approval is the second of the four steps the bank would need to get through to get the asset cap removed. Wells Fargo still requires more proposals related to its regulatory infrastructure approved.
Wells Fargo has benefited from a frothy economy and an aggressive cost-cutting program which has helped Wells Fargo lately improve some of its key metrics, despite the cap. The bank’s net profit in the third quarter zoomed to over $5.1 billion, which is 60% higher year over year. Its revenue slid 2% to reach $18.8 billion and loans dropped by 8%. Before the pandemic, the bank’s total reserve capital was $9.3 billion. Lower revenue also limited its ability to pare its efficiency ratio.
Should You Buy WFC Shares?
Investors will have to see whether the asset cap will be lifted in 2022. The bank has 10 remaining active consent orders to get through, some of which are related to one another. They should also be aware of something from the media on Wells Fargo’s progress pertaining to the asset cap. They should look forward to news similar to when Bloomberg reported about approval of the overhaul plan in February. If no news comes out of it, investors should stay away from the shares for the time being.
Buy WFC Stock at eToro from just $50 Now!
