Baird believes that Wells Fargo’s 2025 rally leaves little room for additional upside in 2026. Analyst David George downgraded the bank to an underperform rating from neutral. His $90 price target is approximately 7% below where the stock closed on Monday. Wells Fargo surged 32.7% last year, marking its third straight annual gain. That advanced far outpaced the S & P 500’s 16% climb for 2025. While George said that credit trends “seem fine” and investors can certainly be bullish on regulatory capital relief, he considers any upside to be more than priced in at this level. WFC 1Y mountain WFC 1Y chart “WFC has been a strong performer in 2025, including the removal of their asset cap and [stress capital buffer] relief, with the focus shifting in recent months towards execution against a high bar from a premium valuation,” he wrote. “The cap lifting unlocks opportunities to increase investments into ongoing initiatives (branch buildouts, wealth adviser hiring, credit card product offerings, auto lending, IB hiring, tech investments, among others) and markets lending but doesn’t really unlock any meaningful day one expense savings.” However, George still applauded Wells Fargo’s underlying fundamentals, calling its updated profitability target “more than realistic.” He also expects the bank to reduce its capital levels over the next several quarters through buybacks and loan growth. “Over time, WFC should generate a high teens [return on tangible common equity], with 17%-18% as an intermediate-term target with further profitability expansion over time,” the analyst said.
