Devin Ryan, Senior Research Analyst at Citizens, laid out a bullish setup for big banks on Monday’s CNBC segment ahead of Q2 earnings. He said: “Tomorrow is going to be, I think, a really good day to kick things off for the top six banks. We’re looking for about 25% year-over-year earnings growth.”

With Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, and Wells Fargo all reporting before the open on Tuesday, July 14, and Morgan Stanley following on Wednesday, July 15, the setup is concentrated and driven by the revival of capital markets along with commercial lending.

Goldman Sachs and Morgan Stanley Could Lead the Bank Earnings Boom

Ryan’s core call is that the biggest upside among the big banks could sit with the most capital-markets-levered franchises. “The companies that are going to do the best are probably the ones more exposed to capital markets. So SpaceX IPO, M&A announcements are up 50% year-to-date through the first half. And so Goldman Sachs, Morgan Stanley probably going to be standouts. We’re looking for almost 40% earnings growth out of both of those.”

Goldman Sachs Is Built for the Capital Markets Revival

Q1 2026 validated the direction. Goldman Sachs (NYSE:GS) posted EPS of $17.55 on $17.23 billion in revenue, with investment banking fees of $2.84 billion up 48% and advisory revenues nearly doubling at $1.49 billion, up 89%. CEO David Solomon said, “Goldman Sachs delivered very strong performance for our shareholders this quarter, even as market conditions became more volatile” in the firm’s Q1 release.

Morgan Stanley Enters Earnings With Record Momentum

Morgan Stanley (NYSE:MS) delivered its own record. Ted Pick’s team reported $20.58 billion in revenue, EPS of $3.43, ROTCE of 27.1%, and advisory revenue up 74% to $978 million. Ryan’s near 40% earnings growth expectation follows Q1 net income growth of 29%.

Wall Street’s Rebound Is Lifting America’s Biggest Banks

Ryan sees the capital markets tailwind lifting the rest of the group. JPMorgan Chase (NYSE:JPM) opened 2026 with EPS of $5.94, up 17%, record Markets revenue of $11.6 billion, and advisory fees up 82% to $1.27 billion. Jamie Dimon flagged “increased fiscal stimulus, the benefits of deregulation, AI-driven capital investment and the Fed’s asset purchases” as tailwinds.

Bank of America (NYSE:BAC) grew EPS 25% year-over-year to $1.11, with equities trading up 30% and investment banking fees up 21%. Citigroup (NYSE:C) delivered net income up 42% and Markets revenue crossing $7 billion for the first time, with equity markets up 39%. Wells Fargo grew EPS 15%, with CIB Markets up 19% and equity capital markets share expanding.

The Next Banking Opportunity May Be Hiding Outside the Mega Banks

Capital markets stocks were up nearly 50% last year and up 20% in 2026 to date, with the S&P 500 up 15% in the second quarter. Goldman shares are up 21.19% year-to-date, and Morgan Stanley is up 26.55%. Ryan’s cautious because: “We think a lot is actually baked in. And so we’re looking for areas where there’s probably more upside. We still think there’s areas of capital markets like middle market sponsors. Private equity still have quite a way to recover.”

On commercial lending re-acceleration, he pointed to two forces. “So data centers is a big piece of the reacceleration, but then also just capital markets turning back on. So as you think about [the] M&A market that’s been dormant, starting to get back to something more normal that leads to lending opportunities into those deals.”

Key Takeaways

The major banks enter Q2 earnings with strong momentum across investment banking, trading, and commercial lending. Goldman Sachs and Morgan Stanley may deliver the strongest results because of their greater exposure to the capital markets recovery, with Ryan expecting earnings growth of nearly 40% from both firms.

Expectations are already high, however, and much of the rebound may be reflected in mega-bank share prices. The next opportunities could emerge among middle-market firms and other lenders that stand to benefit as private equity activity, M&A, and data center investment recover. A broader market pullback or slowdown in AI-related spending remains the clearest risk to that outlook.

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For the retirement-focused investor who wants both a discount and a paycheck, the megabank aisle offers two obvious names: Bank of America (NYSE:BAC) and Wells Fargo (NYSE:WFC). Both posted strong Q1 2026 results, both are returning heavy capital to shareholders, and both trade at similar forward multiples. So which one actually delivers more value and income per dollar right now? Here is the head-to-head, judged on three dimensions that matter to a retiree: valuation, income, and safety.

Dimension 1: Valuation. Winner: Wells Fargo.

On the multiples that matter to a value investor, Wells Fargo trades more cheaply across the board. Bank of America has a trailing P/E of 14 and a forward P/E of 12, with a price-to-book ratio of 1.4. Wells Fargo trades at a trailing P/E of 13 and a forward P/E of 11, on TTM EPS of $6.47 versus Bank of America’s $4.03. Wells Fargo does trade at a slightly higher 1.6 price-to-book ratio, but on the forward earnings that a retirement investor actually cares about, Wells Fargo is meaningfully less expensive. Analysts appear to agree on upside asymmetry: the average target on Wells Fargo is $96.52 against a current price of $85.94 (12.3% implied upside), while Bank of America has already run to $58.36 versus a $64.12 target (9.9%).

Momentum backs the valuation case. Bank of America is up 21.2% over the past year and 6.1% year to date, while Wells Fargo is down 7.8% year to date but 5.5% higher year over year. The valuation gap exists because one has already been bid up and the other has not.

Dimension 2: Income. Winner: Wells Fargo.

This is the cleanest win on the scorecard. Wells Fargo pays $1.80 per share for a 2.1% yield, backed by a Q3 2025 raise from $0.40 to $0.45 quarterly, a 12.5% bump that has held steady into 2026. Bank of America’s dividend runs at $1.10 for a 1.9% yield. At today’s prices, Wells Fargo delivers more income per dollar invested.

The capital-return story is also lopsided. Wells Fargo returned $23 billion to shareholders in 2025, versus $16 billion at Bank of America. In Q1 2026 alone, Wells Fargo repurchased $4.0 billion in stock. Against a market cap of $263.0 billion, that represents aggressive reduction of the share count, and it directly boosts per-share dividends and earnings going forward.

Dimension 3: Safety and Balance Sheet. Winner: Bank of America.

Bank of America wins on the balance sheet. It runs a stronger capital position, with a Common Equity Tier 1 (CET1) ratio of 11.2% versus Wells Fargo’s 10.3%, which slipped from 11.1% a year ago as risk-weighted assets grew,. Bank of America’s franchise is bigger and more diversified: $2.02 trillion in average deposits, an 11th consecutive quarter of sequential deposit growth, and four straight EPS beats. Wells Fargo carries $2.5 billion in nonaccrual CRE office loans and a credit card net charge-off rate of 0.8%. For a retiree who cannot stomach a headline surprise, that combination matters.

The Verdict

Wells Fargo wins the value-and-income showdown, and it is not even close. It trades at a lower forward multiple, pays a higher yield, just raised its dividend by 12.5%, and has an unambiguous catalyst in the asset cap removal that CEO Charlie Scharf called a milestone that lets the bank grow in ways it could not while the asset cap was in place. Management raised its medium-term return on tangible common equity (ROTCE) target to 17% to 18%, and the stock has lagged the peer even as fundamentals improved. That is precisely the setup a value-and-income buyer wants.

Bank of America is the better pick for one specific retiree: the capital-preservation-first investor who prioritizes balance sheet strength, dividend reliability, and a diversified franchise over yield or upside. For everyone else seeking more bang per buck on both value and income, Wells Fargo is the stronger candidate.

The post More Bang for Your Buck: Is Bank of America or Wells Fargo the Better Value-and-Income Buy? appeared first on 24/7 Wall St..

Retirement investors weighing Bank of America (NYSE: BAC) against Wells Fargo (NYSE: WFC) face a deceptively similar scorecard at the top of the analyst page: both megabanks carry a Buy consensus, and both project meaningful upside from current levels. So which belongs in a retirement portfolio right now? The headline numbers look close, but the conviction behind them, and the income, valuation, and risk profiles underneath, point to a clear winner for different investor types.

Start with the price-target scorecard. BofA trades at $57.88 against an analyst target of $63.70. Wells Fargo trades at $83.86 against a target of $96.30. Analysts on average recommend buying shares of each, but they diverge on conviction. While BofA has near-unanimous bullish coverage, Wells Fargo has notably more analysts sitting on the fence.

Dimension 1: Yield and Capital Return

Wells Fargo pays a $0.45 quarterly dividend, yielding 2.2%, versus Bank of America’s $0.28 quarterly payout at a 1.9% yield. Yet the buyback gap reverses the picture. Wells Fargo returned $23 billion to shareholders in 2025, including $18 billion in buybacks, and raised its dividend 13%. BofA returned about $30 billion in 2025 and had an 8% mid-year dividend hike. BofA is returning significantly more cash to shareholders, making it the decisive winner for income-focused retirees seeking total capital return.

Dimension 2: Valuation

Wells Fargo trades at a trailing P/E of 13 on TTM EPS of $6.47, versus BofA at 14 on TTM EPS of $4.03. Forward multiples are nearly identical at about 12, but the underlying catalyst supports a more attractive valuation for Wells Fargo. The Federal Reserve asset cap was removed in Q2 2025, allowing unrestricted balance sheet growth for the first time in years. Management raised its medium-term ROTCE target to 17% to 18%, up from 15%. Investors are thus paying a lower multiple for a structurally improving franchise. Wells Fargo is the winner.

Dimension 3: Balance Sheet Quality and Earnings Momentum

Bank of America’s balance sheet is the stronger of the two. CET1 stands at 11.4% versus Wells Fargo’s 10.3%, which declined from 11.1% a year ago. Q1 2026 EPS at BofA rose 25% year-over-year to $1.11, beating consensus for the fourth consecutive quarter. Wells Fargo grew EPS 15% to $1.60 but saw net interest margin compress to 2.47% from 2.67%. BofA’s revenue mix is also more diversified, with Q1 sales and trading up 13% and investment banking fees up 21%. Prediction markets reinforce this safety assessment: BofA’s implied failure probability of 2.4% is comfortably below that of the European megabank cohort.

The Verdict

Bank of America takes the head-to-head for the income-focused retiree. By leading on capital return, it offers a superior combination of current yield and dividend growth momentum. Combined with its stronger balance sheet and earnings momentum, CEO Brian Moynihan’s firm gives investors a robustly covered payout backed by fundamental tailwinds. For a retirement strategy that prioritizes total shareholder return alongside a strengthening operational profile, BofA provides the more compelling vehicle.

Wells Fargo wins for the value-conscious retiree whose primary focus is entry price and margin of safety. Winning strictly on valuation, the stock trades at a cheaper P/E multiple, offering a lower-volatility entry point for investors wary of paying a premium. The trade-off for this cheaper multiple is a thinner relative yield and less near-term capital return intensity compared to its peer.

For a retirement-focused investor today, Bank of America offers the more dynamic risk-reward profile. While Wells Fargo provides a cheaper valuation, BofA’s superior yield, aggressive buyback potential, and fundamental earnings momentum combine into a total-return setup that its rival’s cheaper multiple alone cannot match.

The post Bank of America or Wells Fargo: Which Mega-Cap Delivers Better Returns? appeared first on 24/7 Wall St..

Bank of America has predicted that the Federal Reserve will be forced to raise interest rates by 75 basis points this year, with the first 25-basis-point hike in September. They also see additional 25-basis-point hikes in October and December. The energy shock from the war with Iran drove inflation higher, with the CPI rising in May to 3.8%, the sharpest increase in three years and well above the Fed’s 2% target. This, in turn, has prompted lenders to demand higher rates to protect returns. Meanwhile, investors sold bonds amid rising inflation and concerns about U.S. debt, which lifted Treasury yields. Since mortgage rates are based on the 10-year Treasury yield plus a risk premium, they rose in tandem. On the fiscal side, federal interest payments now exceed spending on Medicaid, national defense, and all nondefense discretionary programs combined, adding further upward pressure on long-term borrowing costs.

The team at Bank of America frames the rate increase argument on the hand that new Fed Chair Kevin Warsh was dealt, noting the following when discussing the potential for rate hikes this year:

We now expect three 25-basis-point Fed hikes this year, in September, October, and December. This would take the policy rate to 4.25-4.5%. We were skeptical of the need for cuts in 2025. Both the data and our updated read of the Fed’s reaction function suggest it will reverse those cuts in short order. We think the Fed will stay on hold next year. Inflation is likely to remain sticky, keeping the real policy rate from becoming overly restrictive. Meanwhile, the Fed’s inflation problem has gotten unambiguously worse. Core PCE could reach 3.5% in May, nearly 70bp higher than it was a year ago. The pickup has been partly due to tariffs and other one-offs. The Fed was willing to look through the tariffs, but it is losing patience after the latest round of supply shocks. Also, housing-driven disinflation has now mostly run its course, while other core services remain very sticky.

Typically, when interest rates go higher, these four sectors tend to win:

• Financials
• Energy
• Healthcare
• Consumer Staples

We screened our 24/7 Wall St. dividend stocks database for quality companies that pay big, dependable dividends and generate reliable passive income. We found four companies, one in each sector, that are solid bets if the upward trend in interest rates remains and Bank of America is correct in three rate hikes. All are rated Buy by the top Wall Street firms we cover.

Financials: Wells Fargo

Financials are the biggest winner. Banks earn a wider spread between what they pay depositors and what they charge borrowers. Insurers earn more on their investment portfolios. The sector almost mechanically benefits from rising rates, as net interest income rises.

Wells Fargo (NYSE: WFC) operates in 35 countries and serves over 70 million customers worldwide. This money-center giant makes sense, given its 2.09% dividend, as many of the issues that plagued the company over the past five years appear to have been resolved. This financial services company offers a diverse range of banking, investment, mortgage, and consumer and commercial finance products and services in the United States and internationally.

The company operates through four segments. The Consumer Banking and Lending segment offers a diverse range of financial products and services tailored to meet the needs of consumers and small businesses. These include checking and savings accounts, credit and debit cards, as well as home, auto, personal, and small business lending services.

The Commercial Banking segment provides financial solutions to private, family-owned, and specific public companies. Its products and services include banking and credit products across various industry sectors and municipalities, as well as secured lending and lease products, and treasury management services.

The Corporate and Investment Banking segment offers a suite of capital markets, banking, and financial products and services, such as:

• Corporate banking
• Investment banking
• Treasury management
• Commercial real estate lending and servicing
• Equity and fixed-income solutions
• Sales, trading, and research services to corporate, commercial real estate, government, and institutional clients

The Wealth and Investment Management segment provides wealth management, brokerage, financial planning, lending, private banking, and trust and fiduciary products and services to affluent, high-net-worth, and ultra-high-net-worth clients. It also operates through financial advisors in brokerage and wealth offices, consumer bank branches, independent offices, and digitally through WellsTrade and Intuitive Investor.

Barclays has an Overweight rating and a $108 target price.

Energy: Chevron

Energy benefits because rate hikes typically coincide with inflation, and oil and gas prices are a primary driver of inflation. Higher commodity prices equal higher revenues. It’s the inflation hedge play, and it has been the strongest-performing S&P sector so far in 2026.

Chevron (NYSE: CVX) is an American multinational energy company that primarily focuses on oil and gas. It is a safer option for investors looking to position themselves in the energy sector, and it pays a substantial 3.84% dividend, which was raised by 5% earlier this year. The company operates integrated energy and chemicals businesses worldwide.

Chevron operates in two segments. The Upstream segment is involved in:

• Exploration, development, production, and transportation of crude oil and natural gas
• Processing, liquefaction, transportation, and regasification associated with liquefied natural gas
• Transportation of crude oil through pipelines, and transportation, storage
• Marketing of natural gas, as well as operating a gas-to-liquids plant

The Downstream segment engages in:

• Refining crude oil into petroleum products
• Marketing crude oil, refined products, and lubricants
• Manufacturing and marketing renewable fuels
• Transporting crude oil and refined products by pipeline, marine vessel, motor equipment, and rail car
• Manufacturing and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives

It also involves cash management, debt financing, insurance operations, real estate, and technology businesses.

Mizuho has an Outperform rating and a $230 target price.

Healthcare: Merck

Pricing power and steady demand insulate the top healthcare names. They don’t directly benefit from higher rates, but they tend to hold up well because their earnings do not erode as much as those of interest-sensitive sectors.

Merck (NYSE: MRK) develops and produces medicines, vaccines, biological therapies, and animal health products. It is not just a healthcare company but a global force in the industry, paying a solid 2.84% dividend.

Merck operates through two segments. The Pharmaceutical segment offers human health pharmaceutical products in:

• Oncology
• Hospital acute care
• Immunology
• Neuroscience
• Virology
• Cardiovascular
• Diabetes
• Vaccine products, such as preventive pediatric, adolescent, and adult vaccines

The Animal Health segment discovers, develops, manufactures, and markets veterinary pharmaceuticals, vaccines, health management solutions and services, and digitally connected identification, traceability, and monitoring products.

Merck serves:

• Drug wholesalers
• Retailers
• Hospitals
• Government agencies
• Managed healthcare providers, such as health maintenance organizations
• Pharmacy benefit managers and other institutions
• Physicians
• Physician distributors
• Veterinarians
• Animal producers

Merck’s growth is a result of its efforts and strategic collaborations. The company works with AstraZeneca, Bayer, Eisai, Ridgeback Biotherapeutics, and Gilead Sciences to jointly develop and commercialize long-acting HIV treatments, demonstrating a commitment to innovation and growth.

UBS has a Buy rating with a $145 target price.

Consumer Staples: Altria

Although consumer staples do not directly benefit from interest rates, they still emerge as relative winners. By delivering essential products, they maintain stable revenues regardless of the broader economic cycle, making them attractive to investors seeking a reliable safe haven.

Altria (NYSE: MO) is one of the world’s largest producers and marketers of cigarettes and other tobacco-related products. This stock offers value investors a great entry point. Altria manufactures and sells smokable and oral tobacco products in the United States and is the undisputed yield leader among consumer staples Dividend Kings. Its annual dividend of $4.24 per share currently yields 6.1%.

The company primarily sells cigarettes under the Marlboro brand, as well as:

• Cigars and pipe tobacco, principally under the Black & Mild and Middleton brands
• Moist smokeless tobacco and snus products under the Copenhagen, Skoal, Red Seal, and Husky brands
• on! Oral nicotine pouches
• e-vapor products under the NJOY ACE brand

It sells its tobacco products primarily to wholesalers, including distributors and large retail organizations, such as chain stores.

Altria used to own over 10% of Anheuser-Busch InBev (NYSE: BUD), the world’s largest brewer. In 2024, the company sold 35 million of its 197 million shares through a global secondary offering. That represents 18% of its holdings but still leaves 8% of the outstanding shares in its back pocket. Altria also announced a $2.4 billion stock repurchase plan partially funded by the sale.

UBS has a Buy rating with a $76 target price.

The post Bank of America Sees Interest Rates Exploding Higher Soon: Play It Safe With 4 Dividend Giants appeared first on 24/7 Wall St..

Jim Cramer used his Mad Money platform this week to make the case that the Magnificent 7’s appetite for capital is sending an unmistakable signal to investors who actually pay attention to corporate plumbing: the big banks are about to print money.

On the June 18, 2026 episode, Cramer argued that Nvidia alone raised $25 billion in the debt market despite one of the best balance sheets in the country, Google is raising nearly $85 billion in capital, and rumors suggest Meta will soon raise billions as well. Every one of those deals routes fees through Wall Street’s underwriting desks.

The Four Drivers Behind Cramer’s Bank Thesis

Cramer laid out four structural tailwinds. First, a moderately higher short-term rate environment lifts bank earnings because what banks charge borrowers reprices faster than what they pay depositors. With the 10-year Treasury at 4.43% and the 2s/10s spread at 0.29%, the curve is flatter, but short rates remain high enough to keep net interest margins working.

Second, the consumer is holding. Cramer cited retail sales rising 0.9% month-over-month and 6.9% year-over-year, with credit card delinquencies remaining tame. FRED data confirms the spending side: retail sales hit $763.7B in May 2026, a +0.9% monthly gain, while credit card delinquencies sit at 2.92% as of January 2026, down from 3.04% in April 2025.

Third is the deal machine. Cramer flagged $1.2 trillion in public and private M&A activity in the first five months of the year, plus the Mag7 capital raises. Fourth is deregulation, what Cramer called “Prometheus unbound”, pointing to Banco Santander’s acquisition of Webster Financial as the kind of consolidation he expects to spread.

JPMorgan Chase: The Fee Pipeline Is Already Visible

JPMorgan Chase (NYSE:JPM) is the cleanest read. Q1 2026 EPS came in at $5.94, with Investment Banking fees up 28% to $2.88 billion and advisory fees surging 82% to $1.27 billion. CEO Jamie Dimon described “AI-driven capital investment” as a key tailwind in JPM’s Q1 2026 release.

Other Big Bank Beneficiaries

Bank of America (NYSE:BAC) posted Investment Banking fees of $1.84 billion, up 21% year-over-year, with Equities Sales & Trading jumping 30% to $2.84 billion. Wells Fargo (NYSE:WFC) reported Investment Banking revenue of $602 million, up 13%, with Markets revenue up 19%. CEO Charlie Scharf told investors the bank ended the quarter with “a strong investment banking pipeline”.

Why the Mag7 Is Borrowing With Cash Mountains on the Books

NVIDIA (NASDAQ:NVDA) generated $253.5B in trailing revenue with a 63% profit margin, yet still tapped debt markets. The reason: $119B in supply-related commitments tied to AI capacity. Alphabet (NASDAQ:GOOGL) issued $31.1 billion in senior unsecured notes in Q1 2026 per its Q1 8-K filing, with capex more than doubling. Meta Platforms raised 2026 capex guidance to $125-145 billion, an enormous funding gap that explains the rumored bond deal Cramer referenced.

The Valuation Setup

Bank stocks have already started moving. JPM is up 26.11% over the past year, BAC 31.55%, WFC 18.13%. Yet JPM still trades at a trailing P/E of 16 and forward P/E of 15, hardly stretched. Cramer’s point on Mad Money: “with a relatively cheap bank like JP Morgan or Bank of America or even a Wells Fargo, they can very well go up much more before they’re even considered reasonably priced, let alone fully valued.”

The Mag7 capex cycle is now a multi-year funding event. If Cramer is right that deal flow, NIM tailwinds, a resilient consumer, and looser regulation are stacking simultaneously, the underwriters of the AI buildout deserve a closer look than their multiples currently imply.

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The Federal Reserve’s asset cap on Wells Fargo came off in 2025. JPMorgan’s board waved through a $50 billion repurchase authorization. Bank of America returned $9.30 billion to shareholders in a single quarter. The post-stress-test capital return cycle is already running, and the cash is being shoveled out the door faster than most retail investors have noticed. Here are the five names where that shovel is biggest.

1. KeyCorp (KEY): The Regional That’s Buying Back More Stock Than You Think

Start here, because nobody else is. KeyCorp (NYSE:KEY) is a $23.5 billion regional, dwarfed by every other name on this list. But the buyback-to-market-cap math is the most aggressive in the group, and CEO Chris Gorman is leaning on a Basel III tailwind nobody’s pricing in.

Q1 2026 EPS came in at $0.44, an 8% beat. The company plans to repurchase at least $1.3 billion in common shares in 2026, with $389 million already done in Q1 at an average price of $21.47. Gorman flagged that the updated Basel III proposal, if adopted, would imply “more than 100 basis point benefit to our marked CET1 ratio.”

The stock is up 42% over the past year. The Reg-bank rerating is happening in real time, and management is using the rip to retire shares. The bigger banks are doing the same thing, just with more zeros.

2. JPMorgan Chase (JPM): The $50 Billion Authorization Nobody Can Match

This is the heavyweight. JPMorgan Chase (NYSE:JPM) is sitting on $291 billion in CET1 capital and $1.5 trillion in cash and marketable securities. When Jamie Dimon talks about “fortress balance sheet,” this is what he means, and the fortress is now writing checks.

Q1 2026 EPS landed at $5.94, up 17% YoY, on revenue of $49.84 billion. The bank repurchased 27.5 million shares for $8.328 billion in the quarter at an average price of $302.75, on top of $4.10 billion in dividend payments. The quarterly dividend sits at $1.50 per share, with analyst consensus pegging a forward P/E of 14.

Dimon’s framing on the call was characteristically blunt: “We have ample amounts of capital and liquidity, with $291 billion in CET1 capital, $572 billion in total loss-absorbing capacity and $1.5 trillion in cash and marketable securities.” Translation: the buybacks aren’t slowing down. And one peer is actually returning a higher percentage of its market cap.

3. Bank of America (BAC): Capital Returns Up 41% Year-Over-Year

Bank of America (NYSE:BAC) has now seen 11 consecutive quarters of sequential deposit growth, with average deposits topping $2.02 trillion. The deposit franchise funds the lending book, the lending book funds the NII, the NII funds the buybacks. That flywheel is spinning faster.

Q1 2026 EPS hit $1.11, up 25% YoY, on revenue of $30.27 billion. Net interest income climbed 9% YoY to $15.74 billion, and the bank returned $9.30 billion to shareholders in the quarter, of which $7.2 billion went to buybacks. Brian Moynihan said: “Earnings per share rose 25% year-over-year, starting 2026 with strong momentum.”

Capital return in 2025 was 41% higher than the prior year, and the bank now sports a forward P/E of 12. Cheap, paying, buying. The next name on the list isn’t cheap, but it’s running the most profitable capital-markets engine on Wall Street.

4. Morgan Stanley (MS): The Record ROTCE Machine

Morgan Stanley (NYSE:MS) just printed the most profitable quarter in its history. ROTCE hit 27.1%, up from 23.0% a year earlier. For context, big banks generally chase 15% ROTCE as a stretch target. Morgan Stanley is lapping the field, and the dividend is the highest quarterly payout among this group.

Q1 2026 net revenues hit $20.58 billion, up 16% YoY, with net income up 29% YoY to $5.57 billion. The quarterly dividend sits at $1.00 per share, and the firm repurchased $1.75 billion of stock at an average price of $169.15. Wealth Management client assets now stand at $7.34 trillion, with $118.40 billion in net new assets in Q1 alone.

Ted Pick said: “Morgan Stanley reported a record quarter.” The stock has run 74% over the past year, so a chunk of the rerating is in the tape. The unleashed name on this list, however, hasn’t rerated at all.

5. Wells Fargo (WFC): The Asset Cap Came Off, and the Stock Is Down YTD

Here’s the punchline. Wells Fargo (NYSE:WFC) had its Federal Reserve asset cap lifted in 2025, multiple consent orders terminated, and the medium-term ROTCE target raised to 17-18% from the prior 15%. The handcuffs are off after nearly seven years. And the stock is down 11% year-to-date.

I’ve been watching this name for years, waiting for the regulatory unlock. It happened, and Mr. Market shrugged. Q1 2026 EPS came in at $1.60 on revenue of $21.45 billion, with $4.0 billion in buybacks (46.3 million shares) and $5.4 billion total returned to shareholders in the quarter. Full-year 2025 buybacks totaled $18 billion. The dividend has marched from $0.35 in early 2024 to $0.40 mid-2024 to $0.45 in mid-2025, and it’s held there ever since.

Charlie Scharf framed the capital position directly: “We returned $4 billion to shareholders through common stock repurchases while continuing to operate with significant excess capital.” Buy Wells Fargo IF you believe the regulatory unlock translates to ROTCE expansion the market hasn’t yet priced. The inverse: stay away if you think NIM compression at a 2.47% margin (down from 2.67% a year ago) caps the upside.

The Setup

The 10-year sits at 4.49%, in the 95.6th percentile of the past twelve months. The Fed funds upper bound is 3.75%, stable for over six months. That’s the setup banks have been waiting for: a yield curve that pays them to do their job, plus regulatory clarity that lets them return what they earn. KEY is the small-cap leverage play, JPM is the fortress, BAC is the value compounder, MS is the profitability king, and WFC is the unleashed giant the market has yet to re-rate. The capital is moving. Decide who gets yours.

The post Banks Are Paying Again: 5 Financial Dividend Stocks After the Stress Tests appeared first on 24/7 Wall St..

The SPDR S&P Regional Banking ETF (NYSEARCA:KRE) has quietly become one of 2026’s better-performing financial trades, rising roughly 9% year to date and 28% over the past year to around $70 a share. The rally reflects what Q1 earnings just confirmed: regional bank net interest margins are finally widening as deposit costs roll over. For KRE holders, the next 12 months hinge on whether that NIM tailwind survives the Fed’s next move.

The Fund and Where It Sits Today

KRE tracks the S&P Regional Banks Select Industry Index on an equal-weighted basis, which means a roughly 2% to 3% slot for each name regardless of market cap. That construction is what differentiates it from cap-weighted bank funds, and it is also why the fund moves on the health of mid-tier banks like Citizens Financial Group (NYSE:CFG), Truist Financial (NYSE:TFC), and KeyCorp (NYSE:KEY) rather than the money-center giants.

Q1 results were unambiguously good. Citizens posted EPS of $1.13 with NIM expanding 24 basis points year over year to 3.14%. KeyCorp beat by 8% and raised full-year NII guidance to 9% to 10% growth. Truist lifted its 2026 buyback authorization to $5 billion from $4 billion. Capital return is aggressive across the group, which usually signals management confidence in the earnings trajectory.

The Macro Factor That Matters Most: The Fed’s Next Move

The single variable most likely to dictate KRE’s next 12 months is the trajectory of the federal funds rate, currently held at 3.75% since December 10, 2025 after 75 basis points of cuts. The 2s/10s spread sits at 49 basis points, the tightest level in a year, with the 10-year at 4.56%.

The transmission to KRE is direct. Regional banks borrow short and lend long. Further cuts compress deposit-cost relief faster than asset yields can adjust. Bank of America quantified this clearly: a 100 basis point parallel decline below the forward curve would reduce NII by $2 billion over 12 months. Equal-weighted regionals are even more rate-sensitive than the money-center banks, with peers such as Wells Fargo seeing NIM compress from 2.67% to 2.47% while regional peers expanded.

What to monitor: the CME FedWatch tool for cut probabilities, the FOMC dot plot at each meeting, and the monthly CPI release from the BLS. If markets begin pricing more than two cuts in 2026, KRE’s NIM-expansion thesis weakens. If the Fed holds through year-end, the regional bank reset is intact.

The Fund-Specific Factor: Equal-Weighting Plus CRE Concentration

Because KRE equal-weights its holdings, smaller community and regional banks get the same vote as the larger names. That structure amplifies one specific risk: commercial real estate, particularly General Office. Citizens flagged on its Q1 call that its General Office portfolio carries roughly a 20% potential loss rate, and that the bank’s allowance assumes a mild recession. Smaller KRE constituents typically have heavier CRE concentration than CFG does.

The offset is Basel III. KeyCorp CEO Chris Gorman noted the re-proposal “would imply more than 100 basis point benefit to our marked CET1 ratio”. A favorable final rule frees buyback capacity across the index. Track FDIC Quarterly Banking Profile data for CRE delinquency trends, and watch Federal Reserve comment letters on Basel III for the regulatory catalyst.

What Flips the Thesis

Investors who want regional bank exposure without CRE concentration risk can pair KRE with cap-weighted alternatives that tilt more toward larger banks via related sector funds. For KRE specifically: if the Fed holds at 3.75% through Q3 and Basel III is finalized as proposed, the fund’s NIM and capital-return story extends. The signal that flips the thesis is two or more cuts priced into the December 2026 SOFR strip combined with a tick higher in FDIC office-CRE delinquencies. That is the watchlist.

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The smart money read on Wells Fargo (NYSE: WFC) following the $110 million lending and hiring discrimination settlement approved by a federal judge is clearly constructive. Sell-side analysts carry a buy-skewed consensus and a 12-month price target well above where shares trade today, while insiders have been net buyers into the settlement window.

The Hard Data Behind the Bullish Tilt

Three data points anchor the institutional view on Wells Fargo. First, the analyst distribution: four Strong Buy ratings, 12 Buy ratings, nine Hold ratings, and zero Sell or Strong Sell calls. The consensus 12-month price target is $96.02, against a last trade of $75.81 on May 20, 2026. That is a sizable gap, and it has not narrowed since the settlement headlines crossed.

Second is positioning. Institutions own 78.74% of the float, and the most recent insider data shows 68 insider transactions with a net direction of buying. On April 28, 2026, twelve directors acquired common stock units at $81.50 per share in a coordinated transaction, weeks before the settlement was disclosed. There was no panic selling by the C-suite around the settlement window, and the General Counsel made no concentrated sales tied to the legal resolution.

Third, fundamentals reaffirm the thesis that the bulls are pricing. Wells Fargo Q1 2026 delivered diluted EPS of $1.60, revenue of $21.446 billion, and net income of $5.253 billion, with diluted EPS growth of 15% year over year. Every operating segment grew revenue, with Wealth and Investment Management up 14% and CIB Markets up 19%. The company returned $5.4 billion to shareholders in Q1 alone, including a $4.0 billion buyback, and reaffirmed 2026 net interest income guidance of approximately $50.0 billion.

The Gap Between Wall Street and the Market

The disconnect is unusual. Wells Fargo shares are down 18.7% year to date and 7.5% over the past month, even as fundamentals reaffirmed. The stock trades at a P/E of 12 on trailing earnings of $6.47 and a forward P/E of 11, with a price-to-book of 1.4 against book value of $53.19. The dividend yield is 2.4%, with the next payment dated June 1, 2026.

The settlement is a closed chapter, structured as a $100 million mortgage assistance fund for low- and moderate-income borrowers plus $10 million from the insurers of Board of Director Defendants. Compared to $2.205 trillion in total assets and a Q1 buyback program five times the settlement amount, the financial impact is immaterial. What the price action reflects is broader macro positioning: net interest margin compression from 2.67% to 2.47%, oil price uncertainty, and trade policy overhangs flagged on the earnings call.

The Verdict for Retail Investors

The institutional read is constructive. With zero sell ratings, a $96.02 consensus target, net insider buying, and director purchases at $81.50 setting a visible floor in management conviction, professional money is treating the discrimination settlement as a discrete, sized event with manageable financial impact. Wells Fargo investors watching CEO Charlie Scharf’s May 27, 2026, presentation at the Bernstein Strategic Decisions Conference should focus on commentary around the net interest income trajectory under potential rate cuts and the investment banking pipeline, which Scharf described as “strong” at quarter end. The signal: cautious-bullish. The gap between fundamentals and price is the trade Wall Street is already positioned for.

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The Virtus InfraCap U.S. Preferred Stock ETF (NYSEARCA:PFFA) sits at $21.62 heading into the back half of 2026, paying a 9.5% yield that has drawn income investors looking for something between bond coupons and common stock dividends. PFFA raised its monthly payout to $0.1725 per share for 2026, up from $0.17 in 2025, extending a string of uninterrupted monthly distributions that now spans seven years. That cash flow is what most PFFA holders own the fund for, and it is exactly what the next 12 months will pressure-test.

The fund is actively managed, holds 188 preferred securities, carries roughly $1.91 billion in assets, and applies modest leverage to juice its income. That structure has worked: in Q4 2025, PFFA returned roughly 1% on NAV against essentially flat (0.29%) for the S&P U.S. Preferred Stock Index. Year to date in 2026, however, the price is down a fraction of a percent, and the one-year total return on price alone is about 3%. The distribution is doing the heavy lifting, which is why the macro setup matters more than usual.

The Macro Factor: The Fed’s 2026 Cutting Path

Preferred stocks behave like long-duration credit, and PFFA’s leverage roughly doubles its sensitivity to short-term funding rates. The single most important variable for the next 12 months is how aggressively the Federal Reserve actually cuts in 2026, beyond what the market is already pricing in. Virtus’s own portfolio manager flagged in October 2024 that “Fed rate cuts should favor preferred stocks, which offer a risk profile between bonds and common stocks”, and Seeking Alpha’s February 2026 PFFA review explicitly tied the bull case to anticipated rate cuts and declining inflation in 2026.

What to watch concretely: the CME FedWatch tool’s implied path for the December 2026 FOMC meeting, and the Fed’s quarterly dot plot. A faster cutting cycle compresses PFFA’s borrowing costs on its leverage line while lifting the market price of fixed-rate preferreds it already owns. A stall, like 2023’s higher-for-longer surprise, would do the opposite. Check FedWatch weekly and the BLS CPI release monthly. In 2022, when the Fed went the other direction, preferred stock indexes fell roughly 18% on price, and PFFA’s leverage amplified the drawdown.

The Fund-Specific Factor: Leverage Meets Financial-Sector Concentration

PFFA’s edge and its risk are the same thing. The fund layers leverage on top of a portfolio dominated by bank and insurance preferreds from Citigroup, JPMorgan, Bank of America, Wells Fargo, Apollo, and KKR, with growing real estate exposure. The roughly 3% expense ratio is steep, and it only pencils out if active sector rotation keeps outperforming passive preferred ETFs the way it did last quarter.

The signal to watch is credit stress at large U.S. banks: insider activity, dividend coverage, and any preferred deferral language in 10-Qs. The current news flow already shows PNC’s CEO and an EVP selling $14.8 million in shares over 90 days and Gabelli Funds trimming its Wells Fargo stake 13%. Check the FDIC Quarterly Banking Profile and each major holding’s earnings release. If bank net interest margins compress faster than PFFA’s funding costs drop, the leverage that powered 2025 outperformance flips into a headwind, and the distribution math gets tighter.

What to Track Through Year-End

Watch the December 2026 FedWatch probability of a sub-3.75% policy rate as the single cleanest read on PFFA’s tailwind. On the fund itself, watch the next semiannual holdings disclosure for any shift away from money-center bank preferreds toward real estate names, which would tell you the manager sees the financial-sector trade as played out.

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I am opening with the bottom line. Wells Fargo (NYSE:WFC) trades at $79.18 as of May 4, 2026, and our price target for Wells Fargo is $92.25 over the next 12 months. That implies 16.51% upside, and we rate the stock a buy with a confidence level of 90%. The combination of the lifted Federal Reserve asset cap, broad segment momentum, and aggressive buybacks supports an above-consensus stance.

24/7 Wall St. Price Target Summary

A Rough Start to 2026 After a Banner 2025

Wells Fargo has been a tale of two periods. Shares are down 14.64% year to date after starting 2026 at $92.76, with a sharp pullback in March to $75.75 driving most of the damage. Over one year the stock is still up 9.6%, and over five years it has returned 93.76%.

Q1 2026 results, released April 14, 2026, showed EPS of $1.60 on revenue of $21.44 billion, with 15% diluted EPS growth and 11% loan growth. The stock still fell 5.7% after the earnings report as investors fixated on net interest margin compression to 2.47% from 2.67%.

Why Bulls See a Breakout to $100+

The bull case rests on the asset cap removal in 2025, which finally lets Wells Fargo expand its balance sheet after years of regulatory constraint. Q1 2026 already showed period-end loans crossing $1 trillion for the first time since 2020. Segment performance is broad: CIB Markets revenue grew 19%, Wealth and Investment Management 14%, and credit card new accounts surged nearly 60% YoY.

CEO Charlie Scharf reaffirmed the medium-term ROTCE target of 17% to 18%, saying “We feel as confident as ever in that target.” Our bull-case scenario points to $101.74, a 28.49% total return. The Wall Street consensus target of $96.46 sits in the same neighborhood, with 18 buy ratings against 10 holds and zero sells.

What Could Go Wrong

The bear case starts with the 2.47% NIM, which CFO Michael Santomassimo said could compress further. The CET1 ratio fell to 10.3% from 11.1% a year ago, CIB Commercial Real Estate revenue dropped 21%, and credit card delinquencies sit at 2.77%. Higher oil prices could pressure lower-income consumer spending, with Scharf warning the impact “will likely take some time to materialize.”

Bulls would counter that the CET1 decline came alongside $5.4 billion returned to shareholders in the quarter, and that NIM compression partly reflects deliberate growth in lower-ROA Markets assets. Our bear-case scenario still lands at $83.68, a 5.68% return.

Our Take on Wells Fargo Here

The 24/7 Wall St. price target of $92.25 backs a buy at 90% confidence. The tipping factor is the post-asset-cap growth runway combined with shareholder returns of $23 billion in 2025. The bull thesis stays intact if loan growth holds at mid-single digits and the ROTCE target is reaffirmed. The thesis weakens if NIM falls below 2.40% and credit card delinquencies push past 3%.

These projections assume Wells Fargo continues executing on the 17% to 18% ROTCE plan. Significant upside or downside could come from M&A activity, regulatory changes around Basel III, or a sharp credit cycle turn.

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Wells Fargo (NYSE: WFC) stock was last seen changing hands at $80.56 per share, with Wall Street’s average price target up at $96.65. That leaves nearly 20% implied upside between where the bank trades and where analysts think it belongs.

The country’s fourth-largest bank has spent the past year as one of the more interesting rehabilitation stories in financials. The Federal Reserve lifted Wells Fargo’s asset cap in Q2 2025, removing a multi-year handcuff on the loan book and freeing CEO Charlie Scharf to grow the corporate and investment bank without regulatory friction. The bank has now resolved all 14 major consent orders that were part of its multi-year regulatory overhaul, and it spent $5.0 billion on buybacks in the final quarter of 2025.

So why is the stock trading well below where analysts say it should be? The market is paying attention to a different set of numbers.

What Knocked Wells Fargo Off Its December Highs

Q1 2026 earnings broke a long streak of beats. Wells Fargo posted EPS of $1.60, in line with expectations, after a quarterly miss in Q4 2025 when EPS came in at $1.62 versus $1.67 expected. Net interest margin compressed to 2.47% from 2.67%, the CET1 ratio slipped to 10.3% from 11.1% a year ago, and capital ratios tightened as risk-weighted assets grew.

Wells Fargo is down 13.6% year-to-date, having drifted from a December peak near $96 to a March dip below $75. The selloff has been a slow bleed rather than a capitulation event, with shares off 1.7% in the past week.

NIM compression, two consecutive disappointing earnings results, rising C&I nonaccruals, and roughly $2.5 billion in nonaccrual office loans are weighing harder than the bull catalysts.

Why Analysts Still See $97 in the Setup

The bull case rests on what the asset cap removal unlocks. Loans averaged 10% year-on-year growth, the loan book crossed $1 trillion for the first time since early 2020, and CIB Markets revenue jumped 19% year over year, with FICC up 15% and Equities Trading up 21%. Scharf reaffirmed full-year guidance for about $50 billion of net interest income and a medium-term ROTCE target of 17% to 18%, raised from 15%.

Of 25 analysts tracked, four rate it Strong Buy, 12 rate it Buy, nine rate it Hold, and none rate it Sell or Strong Sell. Jefferies initiated coverage with a Buy and a $100 price target after the Fed lifted the asset cap, while KGI moved to Hold at $88, capturing the bull/skeptic split. Scharf told investors that “we still see continued resiliency in the underlying economy and the financial health of the consumers and businesses we serve remains strong,” though he flagged that higher oil prices will take time to filter through.

There is also a personality footnote worth flagging. Jim Cramer has publicly said he bought Wells Fargo at $33 and has repeatedly endorsed Scharf’s turnaround. That’s more of a smart-money data point than a buy signal.

Where the Discount Actually Stands

Shares closed most recently at $80.56 against that consensus target of $96.65, drawn from 25 covering analysts. The forward P/E is 11 on a forward EPS estimate of $7.00, with the dividend at $0.45 quarterly.

While down 13.6% year to date, shares are up 15.5% over the past year. Wells Fargo has lagged the broad index by a wide margin in 2026, even as longer-dated returns remain strong.

An analyst target is a 12-month opinion, not a guarantee. The same Wall Street that holds a $96.65 consensus target has watched the stock slip below its 200-day moving average of $84.44 without rushing to cut their numbers.

Opportunity Outweighs the Trap, but Not by Much

The bull case holds if the post-asset-cap growth story plays out faster than NIM compression damages near-term EPS. The path to $97 runs through accelerating loan growth, sustained CIB momentum, continued buybacks against a 12 trailing P/E, and a clean second half that resumes a positive earnings streak. If Scharf’s 17% to 18% medium-term ROTCE target is credible, the stock is mispriced.

The bear case dominates if the misses are a trend rather than a stumble. Rising C&I nonaccruals, $2.5 billion of office CRE stress, credit card delinquencies at 2.77%, an upcoming governance fight, and lingering compliance overhang could keep multiple expansion locked up regardless of segment growth.

The setup beats the price action, but another miss would flip the story, and the market is already half-pricing that outcome.

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Wells Fargo (NYSE:WFC) stock slipped on Wednesday after three Wall Street firms trimmed their price targets following the bank’s Q1 2026 earnings release on April 14. The cuts from Barclays, Bank of America, and Piper Sandler signal growing unease about whether Wells Fargo can deliver on its ambitious profitability targets. WFC stock trades near $80.75, down 13% year-to-date.

The headline numbers were solid for Wells Fargo: diluted EPS of $1.6, up 15% year-over-year, and revenue of $21.45 billion, up 6%. Yet Wells Fargo’s net interest margin compression and softer-than-expected fee income gave analysts reason to reassess the bank’s trajectory toward its medium-term ROTCE target of 17% to 18%.

The Analyst’s Case

Barclays analyst Jason Goldberg trimmed his WFC stock price target to $108 from $113 while keeping an Overweight rating. Earnings excluding a tax benefit were light, with net interest income, fees, and expenses all coming in below expectations, though Goldberg acknowledged that asset quality remained stable and buybacks continued.

BofA made the sharpest cut, dropping its Wells Fargo stock price target to $95 from $107 while maintaining a Buy. The firm called Wells Fargo’s net interest margin contraction of 13 basis points quarter-over-quarter the “real sticker shock,” and flagged that it raises further doubts around the ROTCE improvement thesis. BofA also lowered its FY26 and FY27 EPS estimates for Wells Fargo by 2% and 4%, respectively, and reduced its assigned multiples on diminished EPS visibility.

Moreover, Piper Sandler lowered its WFC stock price target to $94 from $100, keeping an Overweight rating. Its revised estimates put 2026 EPS at $6.72 (down from $6.82) and 2027 EPS at $7.36 (down from $7.42). These trims reflect a consistent theme: the path to 17% to 18% ROTCE is narrowing.

Why the Move Matters Now

NIM compression is the core concern. Wells Fargo’s net interest margin declined 13 basis points from Q4 2025, landing at 2%, down from 3% a year ago. Wells Fargo CFO Michael Santomassimo was direct on the earnings call, stating, “I would expect additional margin compression next quarter.”

The yield curve isn’t helping. The 10-year minus 2-year Treasury spread compressed sharply from 1% in early February to 1% as of April 14, squeezing the rate environment that banks rely on for NII expansion. Meanwhile, CIB Commercial Real Estate revenue fell 21% year-over-year, adding another drag.

What It Means for Your Portfolio

The bulls aren’t gone. All three firms kept constructive ratings on Wells Fargo stock, and the broader analyst consensus still carries 18 Buy or Strong Buy ratings against 10 Hold ratings and zero Sells, with a consensus target near $99. Wells Fargo CEO Charlie Scharf reinforced confidence on the earnings call, declaring, “We feel as confident as ever in that target. There is absolutely nothing that has changed.”

For long-term, income-focused investors, the $0.45 quarterly dividend and $4 billion in Q1 buybacks indicate that Wells Fargo is still returning serious capital. If NIM compression deepens and ROTCE progress stalls, the multiple could face further pressure.

Watch for whether Q2 NII guidance holds steady and whether margin trends stabilize before adding to a position in Wells Fargo stock. For broader context on how Wall Street is treating financial and other sector names right now, see our recent coverage of analyst activity across major sectors.

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On the April 14 episode of Mad Money, Jim Cramer delivered a sharp diagnosis of why so many investors missed one of the strongest market moves of the year: The catastrophes they feared never arrived. “It just didn’t happen,” Cramer said the session’s gains reflected a collapse of fear rather than a surge of new optimism. The Nasdaq rose 2% and the S&P 500 gained 1% on the day.

Geopolitical fears, private credit collapse warnings, and Magnificent Seven death narratives all failed to materialize. Investors positioned defensively around those narratives missed the move. Cramer’s charitable trust was selling into the overbought rally rather than adding new positions, signaling he sees the current level as a place to trim, not chase.

The Fear That Wasn’t

The VIX tells the story cleanly. The fear gauge stood at 19.12 as of April 13, down 30% over the prior month, after spiking as high as 31.05 on March 27. Meanwhile, University of Michigan consumer sentiment survey hit a record low in March and is deep in recessionary territory. Retail investors, anchored to fear, stayed sidelined as equities recovered.

Nvidia and Amazon Led the Charge

Nvidia (NASDAQ:NVDA) gained 9% over the past week, moving from $178.10 to $198.51. The fundamental case remains intact: Q4 FY2026 revenue came in at $68.13 billion, up 73% year over year, with Data Center networking revenue surging 263%. CEO Jensen Huang stated: “Computing demand is growing exponentially — the agentic AI inflection point has arrived.”

Amazon (NASDAQ:AMZN) was the week’s standout, rising more than 10% from $213.77 to $248.13. AWS grew 24% to $35.58 billion in Q4, its fastest pace in 13 quarters, and the company has $200 billion in capex planned for 2026. Apple (NASDAQ:AAPL) added 2% on the week, with its 2.5 billion active device installed base providing durable revenue visibility.

Cramer’s Bank Call: Santander Over the Field

Cramer’s banking preference is specific. He likes Banco Santander over Deutsche Bank, supported by the numbers. Banco Santander (NYSE:SAN) gained nearly 4% on the week and is up 85% over the past year. Full-year 2025 profit reached $12.81 billion, with a return on tangible equity of 16% and an efficiency ratio of 41%, the best in over 15 years. CEO Ana Botin is targeting RoTE above 20% by 2028.

Wells Fargo: Strong Fundamentals, Soft Reaction

Cramer views Wells Fargo (NYSE:WFC) as trying to bottom but disappointing. The stock was down slightly on the week, despite a solid Q1 report filed that morning. CEO Charlie Scharf noted “diluted earnings per share increasing 15%, revenue increasing 6%, loans increasing 11% and deposits increasing 7% compared to a year ago.” The muted response may reflect macro uncertainty rather than underlying business weakness.

One macro wildcard Cramer flagged: Larry Fink told him oil could be cut in half if the current conflict ends. With Brent crude at $94 per barrel as of April 15, a resolution scenario carries significant deflationary implications for consumers and corporate margins, removing one of the last genuine macro fears overhanging the market.

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With the big banks about to kick off the new earnings-reporting season, this is a good moment to ask what three of the most influential financial institutions have delivered for long-term investors.

Three Banks, Three Very Different Journeys

Bank of America (NYSE: BAC) spent the decade quietly compounding. CEO Brian Moynihan leaned into digital banking, and the bank now counts 59 million active digital banking users. Net interest income (NII) grew for five consecutive quarters through 2025, and full-year net income topped $30 billion. Warren Buffett’s long-standing position gave the stock a credibility floor through volatile stretches.

Citigroup (NYSE: C) is the turnaround story. CEO Jane Fraser launched a sweeping simplification effort, divesting non-core franchises and restructuring around five core businesses. Record revenues across all five business segments in 2025 validated the strategy. The stock spent years trading below book value, making the recent re-rating especially sharp.

Wells Fargo (NYSE: WFC) carries the most dramatic arc. The 2016 fake-accounts scandal triggered a Federal Reserve asset cap that constrained growth for years. The asset cap was removed in Q2 2025, a landmark event. CEO Charlie Scharf called it a chance to “compete on a level playing field.” The market noticed.

What $1,000 Became Across Every Horizon

Citigroup’s one-year surge reflects a stock that spent years undervalued. Bank of America’s 10-year return of 290.4% is the quiet winner, well ahead of the S&P 500’s 223.2%. Wells Fargo’s returns suggest it has moved from being a scandal-ridden laggard to a growth-at-a-reasonable-price (GARP) stock, with investors reassessing after the asset cap removal.

The Verdict Heading Into Earnings Week

Bank of America is a steady compounder with visible earnings momentum. NII guidance calls for 5% to 7% growth in 2026, deposits topped $2 trillion, and the capital return program is accelerating. The bear case is rate sensitivity: a 100-basis-point downward shift in rates is estimated to reduce NII by $2.0 billion to $2.3 billion over 12 months.

Citigroup’s transformation is real, and management targets 10% to 11% return on tangible common equity (ROTCE) for 2026. But the stock has already doubled in a year, and the Q4 GAAP EPS miss of −26.54% is a reminder that headline numbers can still surprise badly.

Wells Fargo presents the most compelling structural case. The asset cap removal is a structural unlock. Management raised its medium-term ROTCE target to 17% to 18% and returned $23 billion to shareholders in 2025. The rerating from the asset cap removal may not yet be fully priced in.

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Pre-Market Stock Futures:

Futures are trading higher after an explosive rally on Tuesday, sparked by the President’s comments that he wants to end the war soon. While this is hardly the final straw for the war, it appears that President Trump, who is finally getting some support from NATO members and Persian Gulf allies in the fight against Iran and its paid proxies, may be making some progress. Add in the fact that Iran’s infrastructure and weaponry have been devastated, and many of the military and Revolutionary Guard leaders have been killed. Toss in the massive short interest, and it all adds up to Tuesday’s huge rally, with the Nasdaq as the big winner, closing up a stunning 3.83% at 21,590, and the small-cap Russell 2000 not far behind, finishing the session at 2,496, up 3.41%. The S&P 500 closed Tuesday at 6,528, up 2.91%, and the Dow Jones Industrial finished the clean sweep of winners, closing at 46,341, up 2.49%.

Treasury Bonds:

Yields were lower across the curve, except at the very short T-bills and the long end, as buyers returned, as they did on Monday. Some of the same reasons we have cited recently for bond prices rising (and yields falling) were again driven by safe-haven demand amid intensified Middle East conflict. Investors shifted from fears of inflation to concerns about slower global growth, prompting a “bull steepening” of the yield curve and a rebound after a month of heavy selling. The 30 year long bond was last seen at 4.91%, while the benchmark 10 year note closed the day at 4.31%.

Oil and Gas:

Prices were mixed across the energy complex, which experienced severe intraday volatility, initially dropping on reports of a potential de-escalation in Iran but remaining supported by lingering anxieties over supply disruptions, particularly after a tanker was hit near Dubai. Toss in futures contract expirations, and the stage was set for a crazy end to the quarter. Brent Crude closed up 4.94% at $118.30, while West Texas Intermediate closed down at $101.50, down 1.33%. Natural Gas finished the day at $2.84, dowm 0.10%. 

Gold:

The precious metals joined in on the rally as gold, which has traded in a tight range for the better part of the first quarter, had an impressive day, closing trading up a whopping 3.49% at $4,667, while Silver really had some momentum buying and was last seen on Tuesday at $75, up a strong 7.18%. Wall Street analysts attributed the big moves higher to the recent decline to market overreaction, as investors moved to buy the dip. This rebound suggests a resilient bullish sentiment, even as the market grapples with rising oil prices, inflationary pressure, and weakening consumer confidence.

Crypto:

The cryptocurrency market endured a turbulent session marked by sharp price swings but demonstrated solid resilience, holding firm at key support levels amid heightened geopolitical tensions. Developments heavily influenced risk sentiment across the broader crypto space, as traders responded swiftly to shifting headlines. Bitcoin led the volatility, surging to an intraday high of $68,300 in early trading after reports emerged of potential peace negotiations between Iran and Israel briefly lifted market optimism. However, the rally proved short-lived, with the crypto giant retracing to a consolidation range of $67,000–$67,800 as uncertainty resurfaced and profit-taking set in. The speed of the reversal underscored how sensitive the market remains to geopolitical developments, with algorithmic trading and leveraged positions amplifying the intraday swings. At 8 AM EDT, Bitcoin was trading at $68,680 while Ethereum was quoted at $2,135. 

24/7 Wall St. reviews dozens of analyst research reports daily to identify new investment ideas for both investors and traders. Some of these daily analyst calls cover stocks to buy. Other calls cover stocks to sell or avoid. Remember that no single analyst call should ever be used as a basis to buy or sell a stock. 

Here are some of the top Wall Street analyst upgrades, downgrades, and initiations seen on Wednesday, April 1, 2026.  

Upgrades:

• Formula One Group (NASDAQ: FWONK) was raised to Buy from Neutral at Bank of America, which has a $105 price target for the shares.
• Rivian Automotive Inc. (NASDAQ: RIVN) was upgraded to Neutral from Underperform at DA Davidson, with a $14 target price.
• United Health Group Inc. (NYSE: UNH) was upgraded to Outperform from Market Perform at Raymond James, which posted a $330 target price objective.
• Walt Disney Company (NYSE: DIS) was raised to Outperform from Market Perform at Raymond James, which has a $115 target for the entertainment giant.
• Wells Fargo & Company (NYSE: WFC) was upgraded to Buy from Hold at HSBC, with a $94 target price.

Downgrades:

• Apellis Pharmaceutical Inc. (NASDAQ: APLS) was downgraded to Hold from Buy at Stifel with a $41 target price as Biogen is acquiring the company.
• Centessa Pharmaceuticals Inc. (NASDAQ: CNTA) was downgraded to Market Perform from Outperform at Leerink, with a $40 target, as Eli Lilly is acquiring the company.
• First Citizens Bancshares Inc. (NASDAQ: FCNCA) was cut to Neutral from Overweight at JPMorgan, which dropped the target price for the shares to $2,200 from $2,450.
• Nike Inc. (NYSE: NKE) was downgraded to Neutral from Overweight at JPMorgan, which slashed the target price for the sports apparel and shoe giant to $52 from $86.
• PPG Industries Inc. (NYSE: PPG) was downgraded to Neutral from Buy at Citigroup, which trimmed the target price for the stock to $113 from $132.

Initiations:

• Boeing Company (NYSE: BA) was initiated with an Overweight rating at Wells Fargo, which has a $250 target price for the aerospace giant.
  
• Datadog Inc. (NASDAQ: DDOG) was started with a Buy rating at Benchmark, with a $150 target price.
• Northrop Grumman Corp. (NYSE: NOC) was started with an Overweight rating at Wells Fargo, with an $800 target price objective.
• Rocket Lab Corp. (NASDAQ: RKLB) was initiated with an Equal Weight rating at Wells Fargo, with a $60 target price.
• ServiceNow Inc. (NYSE: NOW) was initiated with a Buy rating at Benchmark with a $125 target price.

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The 30-year fixed mortgage rate climbed to 6.22% as of March 19, 2026, a three-month high last seen in December of 2025, as the 10-year Treasury yield rose to 4.3% amid broader market unease. Rates had bottomed at 5.98% in late February before climbing steadily through March. The spring housing market is feeling the pressure. But for a select group of companies, higher rates are quietly working in their favor. Here are five stocks positioned to benefit most.

Five Companies Positioned for the High-Rate Environment

Rocket Companies (NYSE: RKT) has emerged as the most comprehensive play on elevated mortgage rates following its transformational $14.2 billion acquisition of Mr. Cooper in late 2025. Rocket now benefits from a “natural hedge”: while high rates dampen new loan volume, they maximize the value of its servicing portfolio. In this environment, homeowners are less likely to refinance, allowing loans to remain on the books longer and generate steady fee income. As of the close of Q4 2025, Rocket’s combined servicing portfolio reached a massive $2.1 trillion in unpaid principal balance, representing approximately one in every six mortgages in the United States and generating roughly $5 billion in annualized recurring cash flow.

JPMorgan Chase (NYSE: JPM) and Wells Fargo (NYSE: WFC) are the big-bank plays. Both of them earn more net interest income (NII) when rates are higher, paying depositors less than they earn on loans and securities. Wells Fargo guided for approximately $50 billion in NII excluding markets in 2026, up from $46.7 billion in 2025. JPMorgan reported NII up 7%, driven by higher deposit balances in Q4 2025. Neither is a pure mortgage play, but both benefit across their entire balance sheets.

The apartment real estate investment trusts (REITs) round out the group. AvalonBay Communities (NYSE: AVB) and Essex Property Trust (NYSE: ESS) benefit indirectly: when buying a home costs too much, people keep renting. AvalonBay’s CEO noted it is “over $2,000 per month more expensive to own a home” in their core markets given current mortgage rates and home prices. While REITs face higher borrowing costs themselves, the boost in rental demand (due to poor home affordability) often outweighs the interest expense, especially for companies with strong balance sheets.

How Each Business Is Positioned

The Rocket Companies model is most directly tied to the rate environment. High rates slow prepayments, extending the life of its mortgage servicing rights (MSRs) and attached cash flows. Following the acquisition of Mr. Cooper, Rocket’s combined servicing portfolio surged to $2.1 trillion in unpaid principal balance across 9.5 million clients. This massive scale now generates approximately $5 billion in annualized recurring cash flow, providing a robust capital base as the company targets a return to consistent double-digit equity growth in 2026.

Among the apartment REITs, Essex and AvalonBay show stronger near-term fundamentals. Essex posted same-property revenue growth of 3.8% year-over-year in Q4 with financial occupancy of 96.3%. Supply in Essex’s West Coast markets is declining, with units across Essex markets falling from 52,400 in 2025 to 42,300 in 2026. AvalonBay reported same-store residential occupancy of 95.8% and guided for 2026 core funds from operations of $11.00 to $11.50 per share.

What Management Is Saying

Rocket CEO Varun Krishna: “This is the power of an integrated homeownership ecosystem—massive top of funnel, scaled origination-servicing recapture, expansive distribution for industry professionals and a technologically advanced foundation for infinite capacity—built for the AI era.”

Wells Fargo CEO Charlie Scharf: “We are excited to now compete on a level playing field and are able to dedicate even more resources to growth with the ability to grow our balance sheet.” The Federal Reserve’s removal of Wells Fargo’s asset cap adds a meaningful growth lever beyond rate sensitivity alone.

AvalonBay CEO Benjamin Schall: “Given the challenges of getting entitlements and how lengthy the process is in our established regions, we expect this supply backdrop to serve as a tailwind for us for the foreseeable future.”

Who Actually Benefits Most

Mortgage rates at a three-month high create a clear hierarchy of winners. Rocket Companies is the clearest winner. By acquiring the world’s largest servicer, Rocket has transformed its business model and now controls a massive $2.1 trillion servicing portfolio. No other company in this group has that level of direct, concentrated exposure to the rate dynamic at play right now.

Essex and AvalonBay are the most compelling indirect beneficiaries, carrying strong occupancy, improving supply backdrops, and markets where the rent-versus-own math heavily favors renting. JPMorgan and Wells Fargo benefit through NII expansion, but mortgage is a small slice of their diversified businesses.

Watch the 10-year Treasury yield and what prediction markets say about the chance rates hit 6.30% by year-end as the key signals for how long this environment persists.

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When it comes to dividend stocks, it’s often the best policy to just buy them and forget about them. It’s amazing how successful a set-it-and-forget-it strategy can be, especially if your broker allows you to automatically reinvest your dividend distributions. For those looking to maximize total cash flow, conservative secondary yield strategies like covered calls can further enhance these long-term positions.

If you choose the right dividend-yielding stocks and leave them alone for years, you could set yourself up for a more comfortable retirement. The easy part is leaving the shares in your portfolio; the challenging part is finding a few great dividend stocks.

I’m happy to help you select a few high-quality passive-income stocks that you can just buy and hold forever. Your journey to life-changing wealth could begin with the following assets and a simple buy-and-hold strategy that practically anyone can use.

AT&T (T)

If you’re in the market for a blue-chip stock, this is as blue as it gets. AT&T (NYSE:T) is an established telecommunications giant and part of American history, not a risk-fraught fly-by-night operation.

In your search for dividend stocks to hold forever, AT&T stock is a great place to start. You can feel secure and comfortable owning a stake in AT&T. This consistently profitable company grew its adjusted earnings per share (EPS) from $0.43 in 2024’s fourth quarter to $0.52 in the fourth quarter of 2025.

Also during that time frame, AT&T’s free cash flow (FCF) expanded from $4 billion to $4.2 billion. Hence, there’s no reason to worry about AT&T going out of business or being unable to pay its dividends. Speaking of dividends, right now AT&T provides a forward annual dividend yield of 3.87%, reflecting a strong commitment to returning capital to shareholders.

Chevron (CVX)

To round out an income portfolio, you need a dependable energy giant like Chevron Corporation (NYSE:CVX). Chevron stands out as a “Dividend Aristocrat” with an incredible 38-year streak of consecutive dividend increases, making it a premier choice for the energy sector.

Chevron’s integrated business model provides a safety net against commodity price swings that smaller competitors can’t match. Currently, the company pays a quarterly dividend of $1.63 per share, and its robust balance sheet allows it to continue investing in growth while rewarding long-term holders. For investors seeking a “set it and forget it” energy play, Chevron’s commitment to capital discipline and shareholder returns is second to none.

Fidelity Enhanced High Yield ETF (FDHY)

While individual stocks are great, adding an active management layer like the Fidelity Enhanced High Yield ETF (BATS:FDHY) provides a diversified income floor. Unlike the quarterly payouts of most stocks, FDHY offers monthly distributions, which is ideal for investors who prefer a steady, consistent cash flow.

FDHY focuses on high-yield debt but utilizes Fidelity’s deep research capabilities to filter out “zombie” companies, prioritizing issuers with stable fundamentals even in volatile interest rate environments. By including an actively managed ETF alongside your blue-chip stocks, you gain professional oversight that helps navigate macroeconomic shifts without requiring daily portfolio monitoring.

Cisco Systems (CSCO)

A set-it-and-forget-it portfolio strategy should include some technology stocks in the mix. To that end, Cisco Systems (NASDAQ:CSCO) remains a foundational choice for technology income.

Cisco Systems recently grew its second-quarter fiscal 2026 revenue by 10% year over year to $15.3 billion, marking a quarterly record. Furthermore, the company improved its adjusted earnings by 11% to $1.04 per share. With $15.8 billion in cash on hand as of May 2026, Cisco is a financially stable business that offers a reliable 2.13% dividend yield for those seeking passive income without the typical tech-sector stress.

Editor’s Note: This article was updated in May 2026 to include Chevron (CVX) as a core energy holding and the Fidelity Enhanced High Yield ETF (FDHY) to provide monthly distribution variety. Additionally, new sections on income enhancement strategies and refreshed fiscal 2026 guidance for Cisco and AT&T have been added to ensure the content reflects current macroeconomic conditions.

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Most dividend investors seek solid passive income streams from quality dividend stocks. Passive income is a steady stream of unearned income that doesn’t require active traditional work. Shared ideas for earning passive income include investments such as dividend stocks, bonds, and mutual funds, as well as real estate and additional income-producing side hustles. These days, investors, especially those nearing retirement, seek passive income streams to supplement Social Security, pension income, or qualified retirement account withdrawals.

For years, we have covered the Bank of America US1 List of top stock picks, and investors who bought them have done exceptionally well. With the first quarter well underway, many investors are seeking safer ideas amid a sustained market rally that could be on the brink, even as major indices remain near all-time highs. We have identified five US1 stocks with significant upside potential and substantial, reliable dividends.

Why do we cover the Bank of America US1 top picks?

The Bank of America US1 list is a collection of the best investment ideas from BofA Global Research analysts. It is drawn from the universe of Buy-rated, US-listed stocks, including American depository receipts (ADRs). The list is managed to provide superior long-term investment performance.

America Healthcare REIT

With a dependable 1.89% dividend and a red-hot sector, this is an outstanding idea. America Healthcare REIT (NYSE: AHR) is a real estate investment trust (REIT) that acquires, owns, and operates a diversified portfolio of clinical healthcare real estate, focusing primarily on senior housing, skilled nursing facilities, outpatient medical (OM) buildings, and other healthcare-related facilities across the United States, the United Kingdom, and the Isle of Man.

It owns and operates its integrated senior health campuses and senior housing operating properties (SHOP). The company’s segments include:

• Integrated senior health campuses, which provide a range of independent living, assisted living, memory care, skilled nursing services, and ancillary businesses.
• OM buildings are leased to multiple tenants under separate leases.
• SHOP includes senior housing providing assisted living care, as well as other services.
• Triple-net leased properties, which include senior housing, skilled nursing facilities, and hospitals.

The Bank of America price target is set at $60.

Cigna

Cigna Group (NYSE: CI) offers tailored health insurance and employee benefits programs. Healthcare names have been outperforming in 2026, yielding 2.08% and offering solid upside potential. This is another outstanding healthcare idea. Cigna provides insurance and related products and services in the United States.

The Evernorth Health Services segment provides a range of coordinated and point-of-service health services, including

• Pharmacy benefits
• Home delivery pharmacy
• Specialty pharmacy
• Distribution and care delivery
• Management solutions to health plans, employers, government organizations, and health care providers

The company’s Cigna Healthcare segment offers:

• Medical, pharmacy, behavioral health, dental, and other products and services for insured and self-insured customers
• Medicare Advantage, Medicare Supplement, and Medicare Part D plans for seniors, as well as individual health insurance plans; and health care coverage in its international markets, as well as health care benefits for mobile individuals and employees of multinational organizations

In addition, it offers permanent insurance contracts sold to corporations to provide coverage for the lives of certain employees, financing employer-paid future benefit obligations. The company distributes its products and services through insurance brokers and consultants, directly to employers, unions, and other groups and individuals, and through private and public exchanges.

The Bank of America target price is $378.

Merck

Merck (NYSE: MRK) develops and produces medicines, vaccines, biological therapies, and animal health products. It is not just a healthcare company but a global force in the industry. This healthcare giant is another no-brainer, paying a solid 2.67% dividend.

The company operates through two segments. The Pharmaceutical segment offers human health pharmaceutical products in:

• Oncology
• Hospital acute care
• Immunology
• Neuroscience
• Virology
• Cardiovascular
• Diabetes
• Vaccine products, such as preventive pediatric, adolescent, and adult vaccines

The Animal Health segment discovers, develops, manufactures, and markets veterinary pharmaceuticals, vaccines, health management solutions and services, and digitally connected identification, traceability, and monitoring products.

Merck serves:

• Drug wholesalers
• Retailers
• Hospitals
• Government agencies
• Managed healthcare providers, such as health maintenance organizations
• Pharmacy benefit managers and other institutions
• Physicians
• Physician distributors
• Veterinarians
• Animal producers

Merck’s growth is a result of its efforts and strategic collaborations. The company works with AstraZeneca, Bayer, Eisai, Ridgeback Biotherapeutics, and Gilead Sciences to jointly develop and commercialize long-acting HIV treatments, demonstrating a commitment to innovation and growth.

Bank of America currently has a $132.00 price target on this stock.

Public Service Enterprise

Off the radar for many, this dividend-paying utility stock still has room to run and yields 2.98%. Public Service Enterprise Group (NYSE: PEG) is a regulated infrastructure company operating New Jersey’s transmission and distribution utility, serving approximately 2.4 million electric and 1.9 million natural gas customers. The company also owns an independent fleet of 3,758 MW of carbon-free, baseload nuclear power-generating units.

The company principally conducts its business through two wholly owned subsidiaries. Public Service Electric and Gas (PSE&G) is a public utility engaged principally in the transmission of electricity and distribution of electricity and natural gas in certain areas of New Jersey. PSEG Power (PSEG Power) is an energy supply company that consists of merchant nuclear generating assets and fuel supply functions, and is engaged in competitive energy sales through its principal direct, wholly owned subsidiaries. The company also has other wholly owned subsidiaries.

The Bank of America target price is $84 and is likely to increase soon.

Wells Fargo

Wells Fargo (NYSE: WFC) operates in 35 countries and serves over 70 million customers worldwide. This money-center giant makes sense given its 2.06% dividend yield, as many of the issues that have plagued the company over the past five years appear to be resolved. This financial services company offers a diverse range of banking, investment, mortgage, and consumer and commercial finance products and services in the United States and internationally.

The company operates through four segments:

• Consumer Banking and Lending
• Commercial Banking
• Corporate and Investment Banking
• Wealth and Investment Management

The Consumer Banking and Lending segment offers a diverse range of financial products and services tailored to meet the needs of consumers and small businesses. These include checking and savings accounts, credit and debit cards, as well as home, auto, personal, and small business lending services.

The Commercial Banking segment provides financial solutions to private, family-owned, and specific public companies. Its products and services include banking and credit products across various industry sectors and municipalities, as well as secured lending and lease products, and treasury management services.

The Corporate and Investment Banking segment offers a suite of capital markets, banking, and financial products and services, such as:

• Corporate banking
• Investment banking
• Treasury management
• Commercial real estate lending and servicing
• Equity and fixed-income solutions
• Sales, trading, and research capabilities services to corporate, commercial real estate, government, and institutional clients

The Wealth and Investment Management provides wealth management, brokerage, financial planning, lending, private banking, and trust and fiduciary products and services to affluent, high-net-worth, and ultra-high-net-worth clients.

It also operates through financial advisors in brokerage and wealth offices, consumer bank branches, independent offices, and digitally through WellsTrade and Intuitive Investor.

Bank of America has set a $107 price target.

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Wells Fargo (NYSE: WFC) and Citigroup (NYSE: C) both reported Q4 2025 earnings on January 14, 2026, yet investors sold off both stocks despite solid results. The selloff reflects concern over net interest income pressure in a higher-for-longer rate environment. Since January 1, 2026, Wells Fargo has declined 4.98% while Citigroup has slipped just 0.36%, revealing how different business models respond to the same rate backdrop.

How the Quarter Landed: Asset Cap Removal vs. Cost Restructuring

Wells Fargo delivered $21.29 billion in revenue and $1.76 EPS, topping earnings expectations but falling short on the top line. Its Consumer, Small & Business Banking segment rose 9% to $6.59 billion, while Credit Card climbed 7% to $1.38 billion. CEO Charlie Scharf called the removal of the Federal Reserve asset cap transformational: “Strong financial performance, removal of the asset cap […] and stronger growth in both our consumer and commercial businesses make me proud of our 2025 results.” Net interest income grew 4% year-over-year on higher loan balances and fixed-rate asset repricing.

Citigroup posted $19.90 billion in revenue and $1.19 EPS, missing both estimates. Net income fell 13.8% to $2.5 billion, weighed down by 6% higher operating expenses tied to compensation, legal, and technology costs. Banking revenues surged 78% and Services rose 15%, but Markets slipped 1%. CEO Jane Fraser’s restructuring included 1,000 job cuts in January 2026. The bank’s presence in 180+ countries provides diversification but also exposes it to geopolitical volatility.

One Bet on Domestic Growth, One on Global Reach

With the asset cap lifted, Wells Fargo can grow deposits and loans without regulatory constraint. Management raised its medium-term return on tangible common equity target to 17% to 18% from 15%, expects mid-single-digit loan and deposit growth in 2026, and anticipates two more Fed rate cuts. The 10Y-2Y yield curve spread at 0.64% supports net interest margin expansion, though further cuts could compress that advantage.

Citigroup leans into institutional banking, cross-border services, and wealth management. Its $208 billion market cap reflects a lower valuation than Wells Fargo’s $278 billion, with Citi trading at 1.06x book value versus Wells Fargo’s 1.64x. Fraser’s turnaround targets a lower expense base while protecting Services and Banking revenue, though Russia-related tax impacts continue to surface.

Why Wells Fargo Edges Ahead for Income

Wells Fargo increased its quarterly dividend 13% over 2025 to $0.45 and repurchased $5.0 billion in stock during Q4 alone. Citigroup’s 2.06% yield is slightly higher, but declining net income and rising expenses cloud the picture. Wells Fargo’s domestic focus also insulates it from geopolitical risk. For those drawn to a turnaround play, Citi’s discount to book value offers appeal, though the restructuring timeline remains uncertain. Trump’s proposed credit card interest rate cap poses a shared risk, though Wells Fargo’s diversified consumer banking portfolio may absorb it better than Citi’s card-heavy U.S. personal banking segment.

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This article will be updated throughout the day, so check back often for more daily updates. 

Markets have no shortage of headlines or earnings to respond to this morning. Overall it appears stock sentiment is being dragged lower by financial stocks as big banks continue to unveil their Q4 results and Wall Street is not impressed. The resilient consumer didn’t disappoint over the early holiday shopping season, with November retail sales 0.6% vs. the prior month and surpassing economist estimates. Results were also buoyed by strong auto sales in the period. President Trump has set his sights on acquiring Greenland for what he described as the “purpose of national security.”

Netflix (Nasdaq; NFLX) stock is getting a bump today as the content streaming giant flexes by potentially overhauling its Warner Bros. offer to an all-cash deal. Separately, Microsoft (Nasdaq: MSFT) reportedly has been deepening its relationship with AI company Anthropic, doling out approximately $500 million per year on AI to support its solutions.

Here’s a look at where things stand as of morning trading:

Dow Jones Industrial Average: 49,121.06 Down 54.82 (-0.11%)
Nasdaq Composite: 23,553.45 Down 164.39 (-0.69%)
S&P 500: 6,933.49 Down 30.25 (-0.43%)

Market Movers

Wall Street banks are selling off after unveiling their Q4 performance. Despite beating analyst estimates on strong net interest income and stock market trading, Bank of America (NYSE: BAC) stock is getting hammered, down 3.5% in early trading. Citi (NYSE: C) is managing a fractional gain despite profit pangs. Wells Fargo (NYSE: WFC) also reported Q4 results, missing on revenue while sending the stock spiraling by a steep 4.1%.

Nvidia (Nasdaq: NVDA) CEO Jensen Huang is not shying away from the Google/Alphabet (Nasdaq: GOOGL) effect, posting on social media that “Alphabet and NVIDIA are expanding their decade-long partnership to advance agentic AI, robotics, drug discovery, and more.”

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