Wells Fargo's (WFC) better-than-expected Q4 results strengthened the idea that improving returns, rather than regulatory relief, is now a key catalyst for the stock, UBS said in a note emailed Wednesday.

Analysts, including Erika Najarian, said the company's total revenue was 2% higher than consensus, with net interest income, or NII, up 1.2% and fees up 2.7%, leading to a 5% earnings beat. It also provided a 2025 guidance that was better than consensus estimates. For 2025, the company expects NII to increase by 1% to 3%, compared to a consensus of a slight decrease, and predicts expenses of about $54.2 billion, slightly below the consensus of $54.4 billion. UBS expects to revise forecasts upwards down the line.

Analysts believe a net interest margin of about 2.80% is achievable this year, which supports their 2025 estimate at the midpoint of the guidance. The analysts increased their EPS estimates for 2025 and 2026 to $6.06 and $7.05, respectively.

UBS adjusted its price target on Wells Fargo to $87 from $85, while keeping buy rating.

Price: 75.48, Change: -0.47, Percent Change: -0.62