Wells Fargo has one job to do to sustain its struggling stock’s recent bounce. It’s not complicated. The stakes are high going into earnings on Tuesday morning, following two consecutive lackluster quarters . Wells Fargo’s path back into our good graces is simple: It needs a clean beat across key metrics. “It has had two mixed quarters back to back. That should create an easier setup into earnings. The expectations are low, but just because expectations are low doesn’t mean we should give it a pass,” Club portfolio director Jeff Marks said during Monday’s Morning Meeting . “We do need to see a solid beat here, or else its longstanding position in the portfolio could be in jeopardy.” That means topping expectations for revenue, earnings, non-interest income, and net interest income – some of which failed to impress investors in the bank’s 2026 first quarter, sending shares down nearly 6% in a single session in mid-April. At the time, we downgraded Wells Fargo to our hold-equivalent 2 rating from buy, and even contemplated whether to exit the position entirely. “Wells hasn’t done what I’ve wanted,” Jim Cramer said last month . “It’s disappointing. I want to sell companies that are underperforming to be able to buy outperformers.” Reflecting that view, we booked profits in our Wells position on June 2 to make sure we protected the 150% average gain on stock purchased in January 2021. Jim has been frustrated with Wells Fargo ever since its post-asset-cap-removal climb ran into a tough 2025 fourth-quarter earnings report in mid-January. The stock had attempted to mount a rally several times after that, but things turned ugly again after those tepid Q1 results. Shortly thereafter, we put Wells Fargo in the penalty box. The stock hit a 52-week low of nearly $73 on May 15. WFC YTD mountain Wells Fargo YTD While shares have gained 19% to over $86 since then, they are still down nearly 6% year to date. For comparison, the S & P 500 is up almost 10.5% for the year, while the financials sector index is up more than 2%. Wells Fargo’s underperformance comes into sharp focus when compared to fellow Club name Goldman Sachs , which is up nearly 20% in 2026, riding a dominant year in investment banking, including a lead underwriter position in SpaceX ‘s record initial public offering (IPO) last month. Goldman also reports on Tuesday morning. (We are not worried about that one.) What Wells Fargo must do is prove that the seven-year wait for the Federal Reserve to lift its $1.95 trillion asset cap for past misdeeds, which finally happened in June 2025, was worth it. A better-than-expected second-quarter earnings report would be a great start for investors to start believing that the stock’s eight-week bounce is the start of its rise back to its record high close above $96 on Jan. 6. Revenue of $21.8 billion expected in Q2 Revenue was a big disappointment last quarter, making it even more important this earnings season. Total revenue for the three months ended…
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