Wells Fargo & Company (WFC) Discounted Future Market Cap

Wells Fargo & Company

WFC (NYSE)

(%)

Valuation
Wells Fargo & Company Discounted Future Market Cap

"""
    Model: Discounted Future Market Cap

# Render model description
model.render_description(r"""
## Discounted Future Market Cap

This model estimates the intrinsic value of a common share by projecting the Future Market Capitalization using the estimated PE Ratio and then discounting it to the Present using an Annual Required Rate of Return.
""")

# Initialize assumptions
assumptions.init({
    "data": {
        "%discount_rate": None,
        "beta": data.get("profile:beta", default=1),
        "%risk_free_rate": data.get("treasury:year10"),
        "%market_premium": data.get("risk:totalEquityRiskPremium"),
        "pe_ratio": data.get("ratio:priceEarningsRatio"),
        "%revenue_growth_rate": None,
        "%net_income_margin": None,
        "historical_years": 10,
        "projection_years": 5,
    },
    "hierarchies": [{
        "parent": "%discount_rate",
        "children": ["beta", "%risk_free_rate", "%market_premium"]
    }]
})

# Calculate cost of equity
cost_of_equity = assumptions.get("%risk_free_rate") + assumptions.get("beta") * assumptions.get("%market_premium")
assumptions.set("%discount_rate", cost_of_equity)

# Compute metrics
data.compute({
    "%grossMargin": "income:grossProfit / income:revenue",
    "%operating_margin": "income:operatingIncome / income:revenue",
    "%netMargin": "income:netIncome / income:revenue",
    "%revenueGrowthRate": "function:growth:income:revenue",
    "%netIncomeGrowthRate": "function:growth:income:netIncome",
    "%totalStockholdersEquityGrowthRate": "function:growth:balance:totalStockholdersEquity",

# Calculating NOPAT (Net Operating Profit After Taxes)
    "%taxRate": "income:incomeTaxExpense / income:incomeBeforeTax",
    "incomeTax": "income:operatingIncome * %taxRate",
    "nopat": "income:operatingIncome - incomeTax",

# Calculating Invested Capital
    "investedCapital": [
        "balance:totalNonCurrentAssets", "-", "balance:cashAndCashEquivalents", "+",
        "balance:totalCurrentAssets", "-", "balance:totalCurrentLiabilities"
    ],
    "%roic": "nopat / investedCapital",
})

data.set_default_range(f"{-assumptions.get('historical_years')}->0")

assumptions.set("%net_income_margin", data.average(f"%netMargin"))
assumptions.set_bounds(
    "%net_income_margin", low=0, high="100%"
)

assumptions.set("%revenue_growth_rate", data.average(f"%revenueGrowthRate"))
assumptions.set_bounds(
    "%revenue_growth_rate", low=0, high="25%"
)

# Compute forecasted values and ratios
data.compute({
    "income:revenue": f"""
        income:revenue:-1 * 
        (1 + {assumptions.get('%revenue_growth_rate')})
    """,
    "%revenueGrowthRate": "function:growth:income:revenue",
    "income:netIncome": f"income:revenue * {assumptions.get('%net_income_margin')}",
}, forecast=assumptions.get("projection_years"))

projected_revenue = data.get("income:revenue")
projected_net_income = data.get(f"income:netIncome:{assumptions.get('projection_years')}")

shares_outstanding = data.get("income:weightedAverageShsOut")
future_market_cap = assumptions.get("pe_ratio") * projected_net_income
discounted_future_market_cap = future_market_cap / (
            (1 + assumptions.get("%discount_rate")) ** assumptions.get("projection_years"))

stock_value = discounted_future_market_cap / shares_outstanding

# Set the final value
model.set_final_value({
    "value": stock_value,
    "units": "$"
})

# Render results
model.render_results([
    [stock_value, "Present Value", "$"],
    [projected_net_income, "Estimated net income", "$"],
    [future_market_cap, "Estimated market capitalization", "$"],
    [discounted_future_market_cap, "Market capitalization discounted to present", "$"],
    [shares_outstanding, "Shares Outstanding", "#"],
    [data.get("income:eps"), "Earnings Per Share (EPS)", "$"],
    [data.get("profile:price"), "Market Price", "$"],
    [data.get("ratio:priceEarningsRatio"), "Price to Earnings (PE) Ratio", "#"]
])

# Render chart
model.render_chart({
    "data": {
        "income:revenue": "Revenue",
        "income:netIncome": "Net Income"
    },
    "start": -assumptions.get("historical_years"),
    "end": "*",
    "properties": {
        "title": "Historical and forecasted data",
        "set_editable": [
            "income:revenue",
            "income:netIncome"
        ]
    }
})

# Render table for estimated future values
model.render_table({
    "data": {
        "income:revenue": "Revenue",
        "%revenueGrowthRate": "Revenue Growth Rate",
        "income:netIncome": "Net Income",
    },
    "start": -1,
    "end": "*",
    "properties": {
        "title": "Estimated Future Values",
        "order": "ascending",
        "number_format": "M"
    }
})

# Render historical values table
model.render_table({
    "data": {
        "income:revenue": "Revenue",
        "income:costOfRevenue": "Cost of Revenue",
        "income:grossProfit": "Gross Profit",
        "%grossMargin": "Gross Margin",
        "income:operatingIncome": "Operating Income",
        "%operating_margin": "Operating Margin",
        "income:netIncome": "Net Income",
        "%netMargin": "Net Margin",
    },
    "start": -assumptions.get("historical_years"),
    "end": 0,
    "properties": {
        "title": "Historical Values",
        "display_averages": True,
        "order": "descending",
        "number_format": "M"
    },
})

# Render historical growth rates table
model.render_table({
    "data": {
        "income:revenue": "Revenue",
        "%revenueGrowthRate": "Revenue Growth Rate",
        "income:netIncome": "Net Income",
        "%netMargin": "Net Margin",
        "%netIncomeGrowthRate": "Net Income Growth Rate",
        "balance:totalStockholdersEquity": "Stockholders Equity",
        "%totalStockholdersEquityGrowthRate": "Equity Growth Rate",
        "%roic": "Return on Invested Capital (ROIC)",
        "nopat": "After-tax Operating Income",
        "%taxRate": "Income Tax Rate",
        "investedCapital": "Invested Capital",
    },
    "start": -assumptions.get("historical_years"),
    "end": 0,
    "properties": {
        "title": "Historical Growth Rates",
        "display_averages": True,
        "order": "descending",
        "number_format": "M"
    },
})

# Set description for assumptions
assumptions.set_description({
    "%discount_rate": r"""
        ## Discount Rate

`Discount Rate` = `Cost of Equity` = `Risk Free Rate` + `Beta` * `Market Premium`

The cost of equity is the theoretical rate of return that an equity investment should generate. It is calculated using the CAPM formula.

[Read More](https://www.investopedia.com/terms/c/costofequity.asp#mntl-sc-block_1-0-20)
    """,

"beta": r"""
        ## Beta

Beta is a value that measures the price fluctuations (volatility) of a stock with respect to fluctuations in the overall stock market.
    """,

"%risk_free_rate": r"""
        ## Risk-Free Rate

The risk-free rate represents the interest an investor would expect from an absolutely risk-free investment over a specified period of time.
        By default, it is equal to the current yield of the U.S. 10 Year Treasury Bond.
    """,

"%market_premium": r"""
        ## Market Premium

Market risk premium represents the excess returns over the risk-free rate that investors expect for taking on the incremental risks connected to the equities market.
    """,

"pe_ratio": r"""
        ## Price to Earnings (PE) Ratio

Estimated Price to Earnings (PE) Ratio at the end of the projection period.

`Future Market Cap` = `PE Ratio` * `Projected Net Income`
    """,

"%revenue_growth_rate": r"""
        ## Revenue Growth Rate

The annual revenue growth rate is applied to projected revenue starting from the second projection year onward.
    """,

"%net_income_margin": r"""
        ## Net Income Margin

Net Income expressed as a percentage of Revenue.
    """,

"historical_years": r"""
        ## Historical Years

The number of historical years used to calculate averages for historical data.
    """,

"projection_years": r"""
        ## Projection Years

The number of years for projecting the analysis into the future.
    """,
})

print("End of model.")

Estimated Value

USD

Market Price USD

* Values are not guaranteed, please do your own
research before making investment decisions.

Discounted Future Market Cap

Interactive Assumptions

Discount Rate Discount Rate Discount Rate `Discount Rate` = `Cost of Equity` = `Risk Free Rate` + `Beta` * `Market Premium` The cost of equity is the theoretical rate of return that an equity investment should generate. It is calculated using the CAPM formula. Read More	%
↳ Beta Beta Beta Beta is a value that measures the price fluctuations (volatility) of a stock with respect to fluctuations in the overall stock market.	#
↳ Risk Free Rate Risk Free Rate Risk-Free Rate The risk-free rate represents the interest an investor would expect from an absolutely risk-free investment over a specified period of time. By default, it is equal to the current yield of the U.S. 10 Year Treasury Bond.	%
↳ Market Premium Market Premium Market Premium Market risk premium represents the excess returns over the risk-free rate that investors expect for taking on the incremental risks connected to the equities market.	%
Pe Ratio Pe Ratio Price to Earnings (PE) Ratio Estimated Price to Earnings (PE) Ratio at the end of the projection period. `Future Market Cap` = `PE Ratio` * `Projected Net Income`	#
Revenue Growth Rate Revenue Growth Rate Revenue Growth Rate The annual revenue growth rate is applied to projected revenue starting from the second projection year onward.	%
Net Income Margin Net Income Margin Net Income Margin Net Income expressed as a percentage of Revenue.	%
Historical Years Historical Years Historical Years The number of historical years used to calculate averages for historical data.	#
Projection Years Projection Years Projection Years The number of years for projecting the analysis into the future.	#

Results
Present Value	66.38 USD
Estimated net income	27.4 Bil. USD
Estimated market capitalization	323.2 Bil. USD
Market capitalization discounted to present	211 Bil. USD
Shares Outstanding	3.18 Bil.
Earnings Per Share (EPS)	6.39 USD
Market Price	79.18 USD
Price to Earnings (PE) Ratio	11.8

Historical and forecasted data

Monetary values in USD

{"sectionId": "section-chart-1", "sectionType": "chart", "title": "Historical and forecasted data", "timeseries": "annual", "series": [{"label": "Revenue", "mappingKey": "income:revenue", "data": [{"l": "2016", "x": "2016-12-31", "y": 94176000000}, {"l": "2017", "x": "2017-12-31", "y": 97741000000}, {"l": "2018", "x": "2018-12-31", "y": 101060000000}, {"l": "2019", "x": "2019-12-31", "y": 105684000000}, {"l": "2020", "x": "2020-12-31", "y": 82227000000}, {"l": "2021", "x": "2021-12-31", "y": 83081000000}, {"l": "2022", "x": "2022-12-31", "y": 83442000000}, {"l": "2023", "x": "2023-12-31", "y": 115340000000}, {"l": "2024", "x": "2024-12-31", "y": 125397000000}, {"l": "2025", "x": "2025-12-31", "y": 123529000000}, {"l": "2026", "x": "2026-12-31", "y": 128441748330, "oy": 128441748330, "e": true, "d": 2026, "g": 3.98, "og": 3.98}, {"l": "2027", "x": "2027-12-31", "y": 133549876661, "oy": 133549876661, "e": true, "d": 2027, "g": 3.98, "og": 3.98}, {"l": "2028", "x": "2028-12-31", "y": 138861155255, "oy": 138861155255, "e": true, "d": 2028, "g": 3.98, "og": 3.98}, {"l": "2029", "x": "2029-12-31", "y": 144383663400, "oy": 144383663400, "e": true, "d": 2029, "g": 3.98, "og": 3.98}, {"l": "2030", "x": "2030-12-31", "y": 150125801693, "oy": 150125801693, "e": true, "d": 2030, "g": 3.98, "og": 3.98}], "dataType": ".", "displayAs": "line", "dataTimeseries": "annual", "hidden": false}, {"label": "Net Income", "mappingKey": "income:netIncome", "data": [{"l": "2016", "x": "2016-12-31", "y": 21938000000}, {"l": "2017", "x": "2017-12-31", "y": 22183000000}, {"l": "2018", "x": "2018-12-31", "y": 22393000000}, {"l": "2019", "x": "2019-12-31", "y": 19715000000}, {"l": "2020", "x": "2020-12-31", "y": 3377000000}, {"l": "2021", "x": "2021-12-31", "y": 22109000000}, {"l": "2022", "x": "2022-12-31", "y": 13677000000}, {"l": "2023", "x": "2023-12-31", "y": 19142000000}, {"l": "2024", "x": "2024-12-31", "y": 19722000000}, {"l": "2025", "x": "2025-12-31", "y": 21338000000}, {"l": "2026", "x": "2026-12-31", "y": 23440619070, "oy": 23440619070, "e": true, "d": 2026, "g": 9.85, "og": 9.85}, {"l": "2027", "x": "2027-12-31", "y": 24372852490, "oy": 24372852490, "e": true, "d": 2027, "g": 3.98, "og": 3.98}, {"l": "2028", "x": "2028-12-31", "y": 25342160834, "oy": 25342160834, "e": true, "d": 2028, "g": 3.98, "og": 3.98}, {"l": "2029", "x": "2029-12-31", "y": 26350018570, "oy": 26350018570, "e": true, "d": 2029, "g": 3.98, "og": 3.98}, {"l": "2030", "x": "2030-12-31", "y": 27397958809, "oy": 27397958809, "e": true, "d": 2030, "g": 3.98, "og": 3.98}], "dataType": ".", "displayAs": "line", "dataTimeseries": "annual", "hidden": false}], "editableDates": {"2026-12-31": 42, "2027-12-31": 43, "2028-12-31": 44, "2029-12-31": 45, "2030-12-31": 46}, "properties": {"display_table": true}, "width": "full"}

Edit Chart Values	2026-12-31	2027-12-31	2028-12-31	2029-12-31	2030-12-31

↳ Growth Rate

Estimated Future Values

Monetary values in USD amounts except #	2025 Dec 31	LTM Mar 10	2026 Dec 31	2027 Dec 31	2028 Dec 31	2029 Dec 31	2030 Dec 31
Revenue	123,529	123,529	128,442	133,550	138,861	144,384	150,126
Revenue Growth Rate	-1.49%	0%	3.98%	3.98%	3.98%	3.98%	3.98%
Net Income	21,338	21,338	23,441	24,373	25,342	26,350	27,398

Monetary values in USD

amounts except #

2025
Dec 31

LTM
Mar 10

2026
Dec 31

2027
Dec 31

2028
Dec 31

2029
Dec 31

2030
Dec 31

Revenue

123,529

128,442

133,550

138,861

144,384

150,126

Revenue Growth Rate

-1.49%

3.98%

Net Income

21,338

23,441

24,373

25,342

26,350

27,398

Historical Values

Monetary values in USD amounts except #	Average	LTM Mar 10	2025 Dec 31	2024 Dec 31	2023 Dec 31	2022 Dec 31	2021 Dec 31	2020 Dec 31	2019 Dec 31	2018 Dec 31	2017 Dec 31	2016 Dec 31
Revenue	103,201	123,529	123,529	125,397	115,340	83,442	83,081	82,227	105,684	101,060	97,741	94,176
Cost of Revenue	24,046	43,488	43,488	47,435	38,142	10,608	-240	22,092	21,539	16,396	11,880	9,679
Gross Profit	79,154	80,041	80,041	77,962	77,198	72,834	83,321	60,135	84,145	84,664	85,861	84,497
Gross Margin	78.22%	64.8%	64.8%	62.17%	66.93%	87.29%	100.3%	73.13%	79.62%	83.78%	87.85%	89.72%
Operating Income	23,372	25,199	25,199	23,364	21,636	15,629	29,563	2,505	25,967	28,538	27,377	32,120
Operating Margin	22.77%	20.4%	20.4%	18.63%	18.76%	18.73%	35.58%	3.05%	24.57%	28.24%	28.01%	34.11%
Net Income	18,812	21,338	21,338	19,722	19,142	13,677	22,109	3,377	19,715	22,393	22,183	21,938
Net Margin	18.25%	17.27%	17.27%	15.73%	16.6%	16.39%	26.61%	4.11%	18.65%	22.16%	22.7%	23.29%

Historical Growth Rates

Monetary values in USD amounts except #	Average	LTM Mar 10	2025 Dec 31	2024 Dec 31	2023 Dec 31	2022 Dec 31	2021 Dec 31	2020 Dec 31	2019 Dec 31	2018 Dec 31	2017 Dec 31	2016 Dec 31
Revenue	103,201	123,529	123,529	125,397	115,340	83,442	83,081	82,227	105,684	101,060	97,741	94,176
Revenue Growth Rate	3.98%	0%	-1.49%	8.72%	38.23%	0.435%	1.04%	-22.2%	4.58%	3.4%	3.79%	7.26%
Net Income	18,812	21,338	21,338	19,722	19,142	13,677	22,109	3,377	19,715	22,393	22,183	21,938
Net Margin	18.25%	17.27%	17.27%	15.73%	16.6%	16.39%	26.61%	4.11%	18.65%	22.16%	22.7%	23.29%
Net Income Growth Rate	42.8%	0%	8.19%	3.03%	39.96%	-38.14%	554.7%	-82.87%	-11.96%	0.947%	1.12%	-4.18%
Stockholders Equity	188,130	181,117	181,117	179,120	185,735	180,227	187,606	184,680	187,146	196,166	206,936	199,581
Equity Growth Rate	-0.524%	0%	1.11%	-3.56%	3.06%	-3.93%	1.58%	-1.32%	-4.6%	-5.21%	3.69%	3.41%
Return on Invested Capital (ROIC)	8.27%	8.48%	8.48%	8.12%	7.69%	6.15%	18.89%	2.43%	7.12%	8.75%	9.94%	4.91%
After-tax Operating Income	19,103	21,358	21,358	19,965	19,029	13,378	23,799	3,662	20,206	22,876	22,460	22,045
Income Tax Rate	12.38%	15.24%	15.24%	14.55%	12.05%	14.4%	19.5%	-46.19%	22.19%	19.84%	17.96%	31.37%
Invested Capital	246,518	251,736	251,736	245,874	247,517	217,677	125,993	150,559	284,004	261,322	225,948	449,337

Market is Open

After-Hours Quote

Market is Open

After-Hours Quote

Wells Fargo & Company Discounted Future Market Cap

Estimated Value

USD

Market Price USD

Discounted Future Market Cap

Interactive Assumptions

Discount Rate

Discount Rate

Beta

Beta

Risk Free Rate

Risk-Free Rate

Market Premium

Market Premium

Pe Ratio

Price to Earnings (PE) Ratio

Revenue Growth Rate

Revenue Growth Rate

Net Income Margin

Net Income Margin

Historical Years

Historical Years

Projection Years

Projection Years

Results

Historical and forecasted data

Estimated Future Values

Historical Values

Historical Growth Rates

Discounted Cash Flow to Firm - Perpetual Growth

Earnings Power Value

Simple Dividend Discount Model

Simple Excess Return Model

Two-Stage Dividend Discount Model

Two-Stage Excess Return Model

Discounted Cash Flow to Firm - Exit Multiple

Discounted Future Market Cap

Peter Lynch Fair Value

Altman Z-Score

Beneish M-Score

Capital Asset Pricing Model (CAPM)

Margin Analysis

Piotroski F-Score

Return on Invested Capital (ROIC)

Shiller PE (CAPE) Ratio

Weighted Average Cost of Capital (WACC)