Wells Fargo & Co (WFC) delivered a fourth quarter that didn't exactly thrill investors, but the bank's forward guidance suggests management has a handle on the cost side of the equation.

What Went Wrong in Q4

Goldman Sachs analyst Richard Ramsden, who maintains a Buy rating and $105 price target on the stock, noted that Wells Fargo's quarterly core pre-provision net revenue missed Street expectations by 4%. The culprits behind the shortfall were pretty clear: core fee income came in 6% light, mostly from weakness in card fees and capital markets activity, while net interest income dropped 0.5%. Making matters worse, core efficiency landed about 60 basis points below where analysts had hoped.

The Brighter Side

Here's where things get more interesting. Management guided to 2026 net interest income of $50 billion, which translates to roughly 5% year-over-year growth and aligns with what the Street was expecting. More importantly, the bank projects 2026 expenses of $55.7 billion—about 0.5% below consensus estimates. That expense discipline, Ramsden argues, means Wells Fargo "should continue to drive meaningful operating leverage in 2026."

Market Reaction: Shares of Wells Fargo dropped 3.9% to $89.82 following the results.