Street View: Wells Fargo holds analyst confidence despite near-term NII adjustments

** Wells Fargo WFC.N beats second-quarter profit estimates on Tuesday but cuts its 2025 guidance for net interest income

** The fourth-largest U.S. lender's reports a net income of$5.49 billion, or $1.60 a share, in the three months ended June 30

** Stock rated "buy" from an average of 25 analysts' ratings; median PT is $87.5, per data compiled by LSEG

STACKING RETURNS, ONE BASIS POINT AT A TIME

** Barclays ("overweight," PT: $87) says although WFC says there likely won’t be a dramatic change after the asset cap is removed, it believes that removal of its asset cap will contribute positively to Earnings Per Share (EPS) and Return on Tangible Common Equity (ROTCE) over time

** BofA Global Research ("buy," PO: $92) expects ROTCE to rise over time, driven by opportunities to boost franchise productivity, especially in the consumer bank, optimize capital, and expand market share in capital markets, credit cards, and wealth.

** Piper Sandler ("overweight," PT: $87) says WFC’s core results were better than expected, but without the benefit of a lower tax rate, the improvement would have been only slightly above their forecast

** Morningstar (fair value: $72) is not overly concerned about the downgrade in Net Interest Income (NII) outlook, as most of the change comes from the markets business, while the core NII trend remains largely unchanged

** "We expect 2025 and 2026 to be good years for NII, especially if rates on the short end of the curve remain high," adds Morningstar