Wells Fargo rally puts second-quarter earnings under scrutiny

Wells Fargo shares have risen 19% from a 52-week low near $73 reached on May 15, trading above $86 ahead of second-quarter results due Tuesday morning, according to CNBC’s Investing Club. The rebound has not erased the bank’s weaker 2026 performance: the stock remains down nearly 6% this year, compared with an almost 10.5% gain for the S&P 500 and a rise of more than 2% for the financials sector index.

The earnings report is being treated by CNBC’s Investing Club as a test of whether Wells Fargo can recover investor confidence after two uneven quarters. Jeff Marks, the club’s portfolio director, said during Monday’s Morning Meeting that expectations are low after “two mixed quarters back to back,” but added that the bank still needs a clear beat across major measures.

Those measures include revenue, earnings per share, net interest income and non-interest income. Wells Fargo’s first-quarter report in April disappointed investors after revenue missed consensus estimates compiled by LSEG, contributing to a nearly 6% decline in the shares in one trading session, according to CNBC’s Investing Club.

Revenue and earnings estimates

For the second quarter, analysts tracked by LSEG expect Wells Fargo to report revenue of $21.8 billion, up 1.6% from a year earlier. In the first quarter, the bank’s revenue rose 6.4% year over year to $21.45 billion, below the $21.8 billion consensus estimate cited by CNBC’s Investing Club.

Earnings per share are expected to reach $1.72, according to LSEG, which would represent a 7.5% year-over-year increase. In April, Wells Fargo reported first-quarter earnings of $1.60 a share, just above the $1.58 consensus estimate.

Net interest income is another focal point. Analysts surveyed by FactSet expect $12.38 billion for the second quarter, an increase of 5.7%, according to CNBC’s Investing Club. Net interest income is the spread between what a bank earns on assets such as loans and what it pays on liabilities such as deposits. It is especially relevant for Wells Fargo because its consumer banking unit, which depends heavily on interest income, generated about 46% of total revenue in the first quarter.

CNBC’s Investing Club said Tuesday’s report will indicate whether Wells Fargo is tracking toward its $50 billion net interest income target for 2026. The figure is sensitive to Federal Reserve policy, because changes in interest rates affect loan yields, deposit costs and customer behavior. Minutes from the Fed’s June meeting, chaired by Kevin Warsh, showed policymakers weighing arguments for both rate increases and cuts, according to CNBC’s Investing Club.

Fee businesses and efficiency

Investors will also assess non-interest income, which includes fees and commissions. Wells Fargo Chief Executive Charlie Scharf said last quarter that the investment-banking outlook remained strong and that the bank entered the second quarter with a solid pipeline driven by mergers and acquisitions and equity capital markets, according to CNBC’s Investing Club.

Scharf also said markets revenue rose 19% from a year earlier, while clients had become more selective and defensive as macroeconomic and geopolitical uncertainty increased.

Bank of America analyst Ebrahim Poonawala expects Wells Fargo to exceed earnings expectations, citing momentum in capital markets, CNBC’s Investing Club reported. Poonawala said the bank has hired bankers over the past two or three years and deployed its balance sheet, making capital markets the likely area for a revenue beat. He also cited a resilient economy, credit quality and loan growth supported by a firm labor market.

Beyond headline results, FactSet estimates point to a 15.3% return on tangible common equity for the second quarter, flat from a year earlier. CNBC’s Investing Club said investors are looking for evidence that Wells Fargo can move toward a sustainable 17% to 18% range on that measure, which gauges how effectively a bank converts tangible equity into profit.

The bank’s efficiency ratio is expected to be 63.3%, according to FactSet, down from 64% a year earlier and 67% in the first quarter. The ratio compares operating expenses with net revenue, so a lower number signals improved cost efficiency.

The results also carry significance because the Federal Reserve lifted Wells Fargo’s $1.95 trillion asset cap in June 2025 after a seven-year restriction tied to past misconduct, according to CNBC’s Investing Club. The coming report will help investors judge how quickly the bank is converting that regulatory relief into financial performance.

This story draws on original reporting from CNBC.