10 Most Undervalued S&P 500 Stocks to Buy Now

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

Forward P/E Ratio as of March 14: 11.81

Number of Hedge Fund Holders: 96

Wells Fargo & Co. (NYSE:WFC) is a financial services company that offers banking, investment, mortgage, and finance products and services across four segments. These include the Consumer Banking & Lending, Commercial Banking, Corporate & Investment Banking, and Wealth & Investment Management segments.

The company’s credit card division grew in 2024 and added over 2.4 million new accounts. It experienced a $17 billion increase in spending. The launch of 11 new card products since 2021 has contributed to a 3% revenue rise. This is driven by higher loan balances and increased spending. Despite overall loan declines within the bank, credit card balances grew, which reflected strong credit standards.

On January 20, analyst Glenn Thum of Phillip Securities maintained a Buy rating on Wells Fargo & Co. (NYSE:WFC) with an $85 price target due to its strong Q4 2024 earnings and a positive 2025 outlook for net interest income growth.

Oakmark Fund favors this company because of its strong earnings, efficient cost management, share repurchases, and positive market sentiment. It stated the following regarding Wells Fargo & Co. (NYSE:WFC) in its Q4 2024 investor letter:

“Wells Fargo & Company (NYSE:WFC) was the top contributor during the quarter. The U.S.-headquartered diversified bank’s stock price rose after reporting what we see as solid third-quarter earnings where the company’s efficiency ratio continued to improve as expenses were well controlled. The fee income segment also performed well, growing 12%. In addition, Wells Fargo had the opportunity to repurchase $3.5 billion in shares during the period, bringing the full-year repurchase to roughly $16 billion. In November, the stock price continued its upward trend following the U.S. presidential election as investors are optimistic that the financials sector will benefit from looser regulations and lower corporate taxes, thus stimulating a better environment for dealmaking. We continue to believe that Wells Fargo is a competitively advantaged bank that can use its superior business mix and return potential to unlock further value.”