2Q‘26 Earnings: Solid Beat Overshadowed by NIM & Deposit Cost Headwinds

研报英文原文证据摘录

2Q‘26 Earnings: Solid Beat Overshadowed by NIM & Deposit Cost Headwinds

d NII (ex. markets)

was reiterated at $48 bn, implying $2 bn of Markets NII. NIM for 3Q26 was guided to see additional

compression broadly in line with 2Q'26 (-4 bps) before stabilizing in 4Q. Deposit costs are expected

to drift modestly higher in 2H26 as interest-bearing deposit growth outpaces noninterest-bearing,

where balances are now expected to hold stable versus the prior outlook that had assumed some

NIB growth. Loans (avg) in 4Q'26 were guided to grow above the prior outlook, which had called for

mid-single-digit Y/Y growth, driven by commercial, card, and auto. Expense guidance reiterated at

$55.7 bn, with revenue related expense upticks offset by ongoing efficiency initiatives. The CET1

target was reiterated at 10.0%–10.5%, though it could be revisited once final Basel III rules are set.

Management also reaffirmed that RWAs should decline 7% if the Basel III Endgame is finalized as

written, and held the GSIB surcharge outlook at 1.5%. Capital priorities remain organic growth over

M&A, and share repurchases are expected to continue in near term. Medium-term ROTCE target

was reiterated at 17%-18% within a "reasonable timeframe" (ROTCE in 2Q was 17.7%).

Estimate changes and recommendation. We are raising our 2026 core EPS to $7.05 from $7.00,

owing largely to higher fee income assumptions, but lowering our 2027 EPS to $7.75 from $7.90,

owing to lower NIM assumptions. We maintain our BUY rating based on our expectation for

sustained strong balance sheet and EPS growth as WFC progresses toward its medium-term

David Chiaverini, CFA * | Equity Analyst

ROTCE target of 17-18%, up from 15% in 2026E. +1 (212) 778-8554 | dchiaverini@jefferies.com

Brian Violino, CFA * | Equity Analyst