Signal Ledger LabSignal Ledger valuation · WFC
Wells Fargo & Company
What the shares are worth today on our research (management’s own targets for each business): every line valued at the end of FY2030, net debt rolled forward, then discounted back to Sep 30, 2026.
- Business value at FY2030
- $330B
- FY2030 net income
- $25B
- FY2030 EPS · P/E
- $8.19 · 13×
- Discount rate (WACC · equity)
- 8.74% · 8.74%
Latest quarter in this research: Q3 2026
Reported Oct 13, 2026 for the quarter to Sep 30, 2026 (company release ↗). This valuation already reflects these results (researched Oct 23, 2026).
| Segment | Revenue | vs a year ago | Operating income | Margin |
|---|---|---|---|---|
| Consumer Banking and Lending | $10.7B | +5% | — | — |
| Commercial Banking | $3.24B | +6% | — | — |
| Corporate and Investment Banking | $5.01B | +3% | — | — |
| Wealth and Investment Management | $4.10B | +12% | — | — |
| Corporate | −$0.61B | — | — | — |
| Reconciling Items | −$0.52B | — | — | — |
- Reported pretax income after funding costs/provisions was $7.098B; operatingIncomeB is null because bank pretax income is not industrial EBIT. Source: https://www.sec.gov/Archives/edgar/data/72971/000007297126000318/wfc3qer10-13x26ex992xsuppl.htm
- Reported ROTCE 16.3%; CET1 10.0%; common income 5.703B differs from group net income 5.951B.
- Revenue includes all corporate and reconciling items; latest September TCE and period-end shares replace June together.
What each business is worth
| Business | Model | FY2030 revenue | Value today | Per share | 2030 multiple | Value from beyond FY2030 |
|---|---|---|---|---|---|---|
| Wells Fargo (firm-wide)Financial services | Return on equity (residual income) | — | $301B | $100.15 | 2.3× P/B | 34% |
| All businesses | — | $301B | $100.15 |
From 2030 back to today
- Enterprise value at end of FY2030$330B
- Less net debt at FY2030$0B
- Equity value at FY2030$330B
- ÷ (1 + 8.74%)^4.3 years at the cost of equity$231B
- + dividends paid on the way, discounted$70B
This reconciliation checks the published Signal Ledger valuation against the net-debt path. The difference is 0.0%, inside our 5% tolerance.
From businesses to one share
- All businesses, valued today$301B
- − borrowings$0B
- − finance leases$0B
- + cash and short-term investments$0B
- ÷ diluted shares3.002B
- Signal Ledger valuation$100.15
Valued on common equity: a financial company's deposits, borrowings, cash and preferred stock are part of the balance sheet it earns its return on, so they are not deducted again.
Year by year to FY2030
| Fiscal year | Revenue | EBITDA | Capex | Free cash flow | Net debt at year end |
|---|---|---|---|---|---|
| FY2026 | $0B | $23B | $0B | $22B | $0B |
| FY2027 | $0B | $25B | $0B | $18B | $0B |
| FY2028 | $0B | $27B | $0B | $20B | $0B |
| FY2029 | $0B | $29B | $0B | $21B | $0B |
| FY2030 | $0B | $29B | $0B | $22B | $0B |
What must be true
- The company spends $0.0B of capital expenditure through FY2030.
- The company stays net cash throughout (lowest point $0.0B of net cash in FY2025).
- Wells Fargo (firm-wide) moves its return on equity from 14.6% to 17.5% by FY2030, against a 8.74% cost of equity.
What the price implies
Joint sales and margin requirements do not apply to this financial model.
At the research price of $83.01 (2026-10-23), the price asks less than our assumptions overall. These are operating requirements at that price, not additional valuations or forecasts.
- Implied discount rate
- 10.1%
- All-business FY2030 sales factor
- —
The WACC that makes model value equal the price, shifting WACC and cost of equity by the same amount. Model: 8.7% WACC · 8.7% cost of equity.
This model has no margin or capacity revenue paths to scale. FY1 stays fixed; the sales change ramps to FY2030 and stays at that factor thereafter.
Single-business sales and margin comparisons do not apply to asset, financial, project or REIT valuation lines.
Mechanical requirements, not forecasts. The separate sales-only and single-business factors are searched from 0.1× to 6×; an unsolved comparison means this business alone cannot get there within those bounds. Single-business revenue changes apply from FY2 onward; margin changes scale the full EBIT or EBITDA margin path. Mixed groups show revenue-weighted EBIT and EBITDA margins separately. Requirements above 100% are not feasible margins. Joint rows instead search non-negative uniform margin factors only up to the EBIT/EBITDA guardrails; the entire margin path scales, including post-FY2030 convergence. Sales and margins change together only in that table. The rate search runs from the largest terminal growth rate plus 0.5 percentage points to 30% WACC.
The discount rate
- Cost of equity
- 8.74%
- WACC
- 8.74%
- 10-year Treasury · model / spot
- 3.87% · 5.13%
r_f 3.87% (5-year average 10-year Treasury yield 3.87% (spot 5.13% on 2026-10-21)) + β 0.97 after Blume adjustment × 5%, rounded to 0.01% (1bp)
methodology §4.5: market-weighted WACC, not rounded
The model uses the recorded 5-year average Treasury yield. The spot yield is shown for context.
Every input, with its source
Show 17 inputs · reported, guidance and rule-based
| Input | Value | Basis | Why |
|---|---|---|---|
| Common equityWells Fargo (firm-wide) | $133.4B | Reported | September 30 ending tangible common equity from the exact supplement reconciliation, matching ROTCE and new period-end shares. sec.gov ↗ |
| Return on equity FY2026Wells Fargo (firm-wide) | 14.6% | Reported | FY2025 return on average tangible common equity 14.61% from Table 39; common earnings 20.285B and average TCE 138.810B. Not the earlier earnings-release average later revised in the 10-K. sec.gov ↗ |
| Return on equity FY2030Wells Fargo (firm-wide) | 17.5% | Guidance | straight line to the 17.5% FY2029 target, then held (methodology §4.6) wellsfargo.com ↗ |
| Payout through FY2026Wells Fargo (firm-wide) | 113.1% | Reported | FY2025 cash-flow common repurchases 17.516B plus common cash dividends 5.434B / net income applicable to common 20.285B = 113.1378%. Cash-flow payments chosen consistently; treasury equity reduction 17.671B includes other accounting effects. sec.gov ↗ |
| Last excess-distribution yearWells Fargo (firm-wide) | FY2026 | Rule | Carry historical above-100% payout only through remaining Q4 2026; no pledge to repurchase at this rate. sec.gov ↗ |
| Sustainable payout thereafterWells Fargo (firm-wide) | 88.6% | Rule | From 2027 retain capital for mature 2% growth at target ROTCE 17.5%; payout 88.5714%. Not company capital-return guidance. sec.gov ↗ |
| Excess-capital budgetWells Fargo (firm-wide) | $1.0B | Rule | September CET1 134.6B minus 8.5% requirement on 1339.8B RWA =20.717B headroom. Permit only 1B; preserve 19.717B buffer, subject to leverage and subsidiary constraints. No future regulatory relief assumed. sec.gov ↗ |
| Protected equity floorWells Fargo (firm-wide) | $132.4B | Rule | Latest modeled TCE 133.447B less only 1B deployable budget =132.447B protected book. CET1 itself is not common tangible book. sec.gov ↗ |
| Terminal growthWells Fargo (firm-wide) | 2.0% | Rule | methodology §4.2 terminal growth for a mature line Valuation methodology §4.2 · Read methodology ↗ |
| WACCDiscount rates | 8.74% | Rule | methodology §4.5: market-weighted WACC, not rounded FRED DGS10 2021-10-20..2026-10-21 |
| Cost of equityDiscount rates | 8.74% | Rule | r_f 3.87% (5-year average 10-year Treasury yield 3.87% (spot 5.13% on 2026-10-21)) + β 0.97 after Blume adjustment × 5%, rounded to 0.01% (1bp) 60 monthly returns vs SPY, 2021-09..2026-09 (adjusted closes) |
| Tax rateDiscount rates | 16.4% | Reported | Q3 tax expense 1.161B / pretax income 7.098B; includes 0.170B discrete benefits. After-tax ROTCE drives value, so tax only affects pretax presentation. sec.gov ↗ |
| Cash and short-term investmentsBalance sheet | $0.0B | Reported | cash: inside the common equity the financial line is valued on (methodology §3.7) balance sheet 2026-06-30 |
| BorrowingsBalance sheet | $0.0B | Reported | borrowings and deposits: inside the common equity the financial line is valued on (methodology §3.7) balance sheet 2026-06-30 |
| Finance leasesBalance sheet | $0.0B | Reported | finance leases: inside the common equity the financial line is valued on (methodology §3.7) balance sheet 2026-06-30 |
| SharesBalance sheet | 3.002B | Reported | shares outstanding as of 2026-09-30 sec.gov ↗ |
| Dividends per yearShareholders | $0.0B | Rule | Financial distributions already include common dividends and buybacks; disable the separate dividend add-on.: paid out of the financial line's earnings at its payout ratio (methodology §3.7) sec.gov ↗ |
Research notes
- balance sheet and shares at 2026-09-30 from the research (newer than the XBRL 2026-06-30); replaced automatically once the filing is in XBRL
- share-count comparison: 3.0746B quarter 2026-04-01..2026-06-30 · 0000072971-26-000302; point-in-time denominator retained
- valued on common equity (financial lines): cash, borrowings, deposits and preferred are inside it, not deducted again; dividends come from the payout ratio
- cost of equity 8.74% (β 0.97 after Blume adjustment), WACC 8.7%
- Wells Fargo (firm-wide): residual income on $133.4B of common equity, earnings = ROE × equity, payout 113% (methodology §3.7)
Signal Ledger research under one stated scenario — management's targets are delivered — not a forecast that they will be and not investment advice. The research desk (GPT-6.1 (Codex)) gathers filings, guidance and targets; deterministic code applies the samepublished rules to every company and checks the result. Inputs may contain errors; follow the source links before relying on them. Read our valuation methodology →