How Risky Is Wells Fargo Stock?
Wells Fargo (NYSE: WFC) has certainly been on a bumpy ride over the last few years. It has had to deal with the fallout from its phony-accounts scandal, its many leadership changes, and its slumping profitability due to the coronavirus pandemic. All of these struggles may lead some to believe that the stock could be risky, which is certainly a fair question given everything that has happened. I, however, do not see the stock to be that risky in the long term, especially at the current levels the bank is trading at. Here's why.
You can examine risk at Wells Fargo from a safety standpoint, and whether the bank can return to its former profitability levels and raise its stock price.
From a capital and credit quality perspective, the bank presents little risk of failing or not having adequate capital to deal with potential loan losses. The coronavirus pandemic gave the banking system its first real test since the Great Recession, shuttering parts of the economy for months on end, with rising unemployment numbers and falling gross domestic product (GDP).
Source Fool.com
