10 Most Undervalued Large Cap Stocks To Invest In

4. Wells Fargo & Co. (NYSE:WFC)

Forward Price-to-Earnings Ratio: 10.03

Number of Hedge Fund Holders: 83

Wells Fargo & Co. (NYSE:WFC) is one of the largest banks in the US, offering a range of financial products and services, including commercial banking, retail banking, wealth management, and investment banking, and is known for its extensive network of branches and ATMs across the country, making it a convenient choice for many customers. It operates in 35 countries and serves over 70 million customers worldwide.

Revenue for the second quarter of 2024 from consumer, small, and business banking declined 5% from a year ago due to lower deposit balances and higher deposit costs. Home lending revenue was down 3%, auto revenue declined 25%, personal lending revenue was down 4%, middle market banking revenue dropped 2%, and asset-based lending and leasing revenue decreased 17% year-over-year.

Despite challenges in all of these segments, the company delivered a strong quarter with fee-based revenue growth across key categories and progress on strategic initiatives. It made $20.69 billion in Q2 2024 revenue, up 0.76% from a year-ago period. Credit card revenue was stable from a year ago, with growth in new account originations offset by lower other fee revenue. While market revenue grew 16%, driven by strong performance in equities, structured products, and credit products.

Wells Fargo & Co. (NYSE:WFC) is a well-positioned financial services company with a strong competitive advantage. Its diversified offerings, extensive branch network, and focus on margin expansion in key segments position it for continued growth and profitability. The lifting of the asset cap and ongoing investments in various areas, including trading, investment banking, and credit card services, are expected to drive further earnings growth.

ClearBridge Value Equity Strategy stated the following regarding Wells Fargo & Company (NYSE:WFC) in its fourth quarter 2023 investor letter:

“Stock selection in the financials sector proved to be the largest contributor to relative outperformance. Banking stocks such as Wells Fargo & Company (NYSE:WFC) saw their share price rise during the quarter as investors anticipated Fed rate cuts that would reduce deposit costs while retaining economic strength and minimizing the risk of credit losses.”