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Summary

  • Q2 2014 EPS reported of $1.01 is up 3% yoy.
  • Q2 earnings have confirmed my earlier opinion of the stock.
  • While the EPS was anticipated, the company reported lower ROE and ROA than I expected.

Wells Fargo (NYSE:WFC) reported earnings today that were roughly in line with EPS and revenue estimates. EPS came in at $1.01, which was in line with analyst estimates. Revenue came in at $21.06 billion, which was $240 million above estimates.

However, ROE fell from 14.35% in Q1 to 13.4% in Q2. ROA fell from 1.57% in Q1 to 1.47% in Q2.

In my previous article about Wells Fargo titled "Steady as She Goes?," I put a price target of $60 on the company (by end 2015). Since Wells met EPS expectation, I feel that target is still valid. However, the ROE and ROA ratios bear close watching in upcoming quarters. The ROE and ROA had been climbing steadily since 2011 before this quarter.

Source: Update: Wells Fargo Earnings