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Citigroup vs. Wells Fargo: Which Bank Stock Is a Smarter Buy Now?
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Key Takeaways
Citigroup is nearing the final phase of its restructuring, boosting capital and growth potential.
C projects seeing a 4-5% revenue CAGR and stronger EPS growth, with upward estimate revisions.
Wells Fargo benefits from asset cap removal but faces weaker earnings revisions and slower growth.
Citigroup, Inc. (C - Free Report) and Wells Fargo & Company (WFC - Free Report) stand as two of the most influential players in the U.S. banking sector, each navigating a pivotal phase, shaped by strategic transformation and shifting economic conditions. While Citigroup is approaching the final stretch of its multi-year restructuring, aimed at streamlining operations and unlocking growth, Wells Fargo is capitalizing on renewed flexibility following the removal of long-standing regulatory constraints.
As both banks position themselves for the next leg of expansion, a closer look at their strategies, earnings outlooks and valuation trends offers valuable insight into which stock may present the more compelling investment opportunity today.
C & WFC: 2 Banking Giants, 2 Strategies
Citigroup and Wells Fargo are taking different approaches to strengthen their operations and unlock growth opportunities.
C has been betting on leaner, streamlined operations. The company is emphasizing growth in core businesses through restructuring operations internationally. In April 2021, Citigroup announced the plan to exit the consumer banking business in 14 markets across Asia and EMEA. During the first-quarter 2026 earnings call, management stated that the company entered the final phase of its divestitures, and 90% of the transformation programs were at or near the target.
In February 2026, Citigroup completed the sale of its Russia-based banking subsidiary, AO Citibank, to Renaissance Capital. The sale of AO Citibank strengthens the company’s capital position and streamlines its balance sheet. In the same month, C announced agreements with several investors for commitments to purchase an aggregate 24% equity stake in Grupo Financiero Banamex, S.A. de C.V (Banamex), following the divestiture of 25% stake in Banamex to a Mexican business leader in December 2025.
The company is now preparing for a planned initial public offering of its Mexican consumer, and small and middle-market banking units. As part of its strategy, Citigroup continues to make progress with the wind-down of its Korea consumer banking operations. These initiatives will free up capital and help the company pursue investments in wealth management and IB operations, which will stoke fee income growth. Supported by these initiatives, Citigroup expects revenues to see a 4-5% compound annual growth rate (CAGR) through 2026.
Conversely, Wells Fargo has been exiting non-core, lower-return businesses to sharpen its focus on consumer banking, commercial lending and other high-return areas. Under CEO Charlie Scharf since 2019, the strategy targets up to $10 billion in annual cost cuts and capital reallocation to core franchises. In line with this effort, in January 2026, WFC sold its rail lease portfolio to a GATX-Brookfield joint venture.
Wells Fargo reached a milestone in June 2025 when the Federal Reserve lifted the asset cap imposed in 2018 following the bank’s fake account scandal. The removal eliminates a long-standing constraint on balance-sheet expansion, allowing the company to grow deposits, increase loan balances and expand securities holdings, thereby unlocking its full operating potential. With greater strategic flexibility and improved earnings visibility, WFC’s expects its medium-term return on tangible common equity to be 17-18%, indicating stronger profitability prospects over the next few years.
Citigroup vs. Wells Fargo: 2 Banks, 1 Fed Pivot
Following the initial easing in 2024 and three subsequent rate cuts in 2025, the Federal Reserve has kept interest rates steady so far in 2026. Also, the Fed has indicated one additional rate cut this year. Lower rates support net interest income (NII) growth, a critical earnings driver for banks like WFC and C, as funding pressure eases.
While lower benchmark rates can compress yields on loans and securities, improving the lending backdrop and higher refinancing will help offset this. Also, relatively lower rates will increase borrowing and boost market liquidity, driving higher deal volumes and trading opportunities. This will support investment banking (IB) and trading businesses for both companies.
In 2025, Citigroup’s NII rose 11% year over year in 2025. Meanwhile, Wells Fargo’s NII grew marginally year over year. In first-quarter 2026, C’s NII, excluding Markets, rose 7%. Conversely, WFC’s NII rose 5.2%.
Wells Fargo expects 2026 NII to be $50 billion, up from $47.8 billion in 2025. This outlook is supported by balance-sheet growth, a favorable loan and deposit mix, and continued fixed-asset repricing, partially offset by the impacts of expected rate cuts. Then again, Citigroup’s NII (excluding Markets) is projected to rise 5-6% on a year-over-year basis in 2026.
WFC & C’s Expense Management Efforts
As the banking industry adapts to rising expenses, shifting customer preferences and ongoing digital disruption, Citigroup and Wells Fargo are sharpening their focus. However, their approaches to expense management reflect two different paths.
Citigroup is executing on its plan to cut 20,000 jobs by 2026 and has already reduced headcount by more than 10,000 employees, while focusing on process streamlining and automation to reduce manual touchpoints. The bank is also increasingly deploying artificial intelligence (AI) tools to support these efforts.
During the first-quarter 2026 earnings update, management emphasized that AI tool adoption has increased to more than 80%. Driven by these efforts, management expects to achieve $2-$2.5 billion of annualized run rate savings by 2026.
Wells Fargo, alternatively, is taking a more balanced approach to its operations. As part of this optimization strategy, it has become more deliberate in its branch location strategy, as the number of branches declined 1.5% year over year to 4,093 at the end of the first quarter of 2026. Its headcount reduced 6.5% year over year to 201 thousand by the end of the first quarter of 2026, marking 23 consecutive quarters of reductions.Though the company expects expenses to increase year over year in 2026, its sustained focus on operational efficiency and cost discipline is expected to support profitability and enhance shareholder value in the long run.
C & WFC’s Stock Performance, Valuation & Other Comparisons
In the past year, Wells Fargo shares have gained 13.3%, whereas Citigroup’s stock has surged 87.5%. In comparison, the industry has risen 37.3%.
Price Performance
Image Source: Zacks Investment Research
In terms of valuation, Citigroup’s trailing 12-month price-to-earnings (P/E) ratio is 11.55X, while Wells Fargo’s is 11.31X. Both stocks are trading at a discount compared with the industry’s trailing 12-month P/E ratio of 13.01X, but the WFC stock is cheaper than C.
Price-to-Earnings F12M
Image Source: Zacks Investment Research
Additionally, both companies regularly pay out dividends. WFC has a dividend yield of 2.2% while C has a dividend yield of 1.9%. Here, WFC holds an edge over C.
Dividend Yield
Image Source: Zacks Investment Research
How Do Estimates Compare for Citigroup & Wells Fargo?
The Zacks Consensus Estimate for C’s 2026 sales and EPS implies year-over-year increases of 8.4% and 33.3%, respectively. EPS estimates for 2026 have been revised upward over the past month.
Estimate Revision Trend
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for WFC’s 2026 sales and EPS suggests year-over-year rallies of 4.7% and 8.8%, respectively. EPS estimates for 2026 have been revised downward over the past month.
Estimate Revision Trend
Image Source: Zacks Investment Research
C or WFC: Which Stock to Bet On
While Wells Fargo benefits from the removal of its asset cap, a higher dividend yield and improving balance-sheet flexibility, Citigroup appears better-positioned for stronger upside from here. The company’s restructuring is entering its final phase, divestitures are strengthening capital, and management’s focus on wealth management, IB and operational efficiency should support fee income growth and margin expansion.
Citigroup also has a stronger earnings outlook compared with Wells Fargo. Upward estimate revisions for C reinforce its improving earnings momentum, while WFC has seen downward revisions.
Therefore, despite Wells Fargo’s progress and slightly cheaper valuation, Citigroup emerges as the smarter buy for now, backed by its transformation progress, stronger projected earnings growth, improving efficiency and greater upside potential.
View the Zacks #1 Rank List
Image: Bigstock
Citigroup vs. Wells Fargo: Which Bank Stock Is a Smarter Buy Now?
Key Takeaways
Citigroup, Inc. (C - Free Report) and Wells Fargo & Company (WFC - Free Report) stand as two of the most influential players in the U.S. banking sector, each navigating a pivotal phase, shaped by strategic transformation and shifting economic conditions. While Citigroup is approaching the final stretch of its multi-year restructuring, aimed at streamlining operations and unlocking growth, Wells Fargo is capitalizing on renewed flexibility following the removal of long-standing regulatory constraints.
As both banks position themselves for the next leg of expansion, a closer look at their strategies, earnings outlooks and valuation trends offers valuable insight into which stock may present the more compelling investment opportunity today.
C & WFC: 2 Banking Giants, 2 Strategies
Citigroup and Wells Fargo are taking different approaches to strengthen their operations and unlock growth opportunities.
C has been betting on leaner, streamlined operations. The company is emphasizing growth in core businesses through restructuring operations internationally. In April 2021, Citigroup announced the plan to exit the consumer banking business in 14 markets across Asia and EMEA. During the first-quarter 2026 earnings call, management stated that the company entered the final phase of its divestitures, and 90% of the transformation programs were at or near the target.
In February 2026, Citigroup completed the sale of its Russia-based banking subsidiary, AO Citibank, to Renaissance Capital. The sale of AO Citibank strengthens the company’s capital position and streamlines its balance sheet. In the same month, C announced agreements with several investors for commitments to purchase an aggregate 24% equity stake in Grupo Financiero Banamex, S.A. de C.V (Banamex), following the divestiture of 25% stake in Banamex to a Mexican business leader in December 2025.
The company is now preparing for a planned initial public offering of its Mexican consumer, and small and middle-market banking units. As part of its strategy, Citigroup continues to make progress with the wind-down of its Korea consumer banking operations. These initiatives will free up capital and help the company pursue investments in wealth management and IB operations, which will stoke fee income growth.
Supported by these initiatives, Citigroup expects revenues to see a 4-5% compound annual growth rate (CAGR) through 2026.
Conversely, Wells Fargo has been exiting non-core, lower-return businesses to sharpen its focus on consumer banking, commercial lending and other high-return areas. Under CEO Charlie Scharf since 2019, the strategy targets up to $10 billion in annual cost cuts and capital reallocation to core franchises. In line with this effort, in January 2026, WFC sold its rail lease portfolio to a GATX-Brookfield joint venture.
Wells Fargo reached a milestone in June 2025 when the Federal Reserve lifted the asset cap imposed in 2018 following the bank’s fake account scandal. The removal eliminates a long-standing constraint on balance-sheet expansion, allowing the company to grow deposits, increase loan balances and expand securities holdings, thereby unlocking its full operating potential. With greater strategic flexibility and improved earnings visibility, WFC’s expects its medium-term return on tangible common equity to be 17-18%, indicating stronger profitability prospects over the next few years.
Citigroup vs. Wells Fargo: 2 Banks, 1 Fed Pivot
Following the initial easing in 2024 and three subsequent rate cuts in 2025, the Federal Reserve has kept interest rates steady so far in 2026. Also, the Fed has indicated one additional rate cut this year. Lower rates support net interest income (NII) growth, a critical earnings driver for banks like WFC and C, as funding pressure eases.
While lower benchmark rates can compress yields on loans and securities, improving the lending backdrop and higher refinancing will help offset this. Also, relatively lower rates will increase borrowing and boost market liquidity, driving higher deal volumes and trading opportunities. This will support investment banking (IB) and trading businesses for both companies.
In 2025, Citigroup’s NII rose 11% year over year in 2025. Meanwhile, Wells Fargo’s NII grew marginally year over year. In first-quarter 2026, C’s NII, excluding Markets, rose 7%. Conversely, WFC’s NII rose 5.2%.
Wells Fargo expects 2026 NII to be $50 billion, up from $47.8 billion in 2025. This outlook is supported by balance-sheet growth, a favorable loan and deposit mix, and continued fixed-asset repricing, partially offset by the impacts of expected rate cuts. Then again, Citigroup’s NII (excluding Markets) is projected to rise 5-6% on a year-over-year basis in 2026.
WFC & C’s Expense Management Efforts
As the banking industry adapts to rising expenses, shifting customer preferences and ongoing digital disruption, Citigroup and Wells Fargo are sharpening their focus. However, their approaches to expense management reflect two different paths.
Citigroup is executing on its plan to cut 20,000 jobs by 2026 and has already reduced headcount by more than 10,000 employees, while focusing on process streamlining and automation to reduce manual touchpoints. The bank is also increasingly deploying artificial intelligence (AI) tools to support these efforts.
During the first-quarter 2026 earnings update, management emphasized that AI tool adoption has increased to more than 80%. Driven by these efforts, management expects to achieve $2-$2.5 billion of annualized run rate savings by 2026.
Wells Fargo, alternatively, is taking a more balanced approach to its operations. As part of this optimization strategy, it has become more deliberate in its branch location strategy, as the number of branches declined 1.5% year over year to 4,093 at the end of the first quarter of 2026. Its headcount reduced 6.5% year over year to 201 thousand by the end of the first quarter of 2026, marking 23 consecutive quarters of reductions.Though the company expects expenses to increase year over year in 2026, its sustained focus on operational efficiency and cost discipline is expected to support profitability and enhance shareholder value in the long run.
C & WFC’s Stock Performance, Valuation & Other Comparisons
In the past year, Wells Fargo shares have gained 13.3%, whereas Citigroup’s stock has surged 87.5%. In comparison, the industry has risen 37.3%.
Price Performance
Image Source: Zacks Investment Research
In terms of valuation, Citigroup’s trailing 12-month price-to-earnings (P/E) ratio is 11.55X, while Wells Fargo’s is 11.31X. Both stocks are trading at a discount compared with the industry’s trailing 12-month P/E ratio of 13.01X, but the WFC stock is cheaper than C.
Price-to-Earnings F12M
Image Source: Zacks Investment Research
Additionally, both companies regularly pay out dividends. WFC has a dividend yield of 2.2% while C has a dividend yield of 1.9%. Here, WFC holds an edge over C.
Dividend Yield
Image Source: Zacks Investment Research
How Do Estimates Compare for Citigroup & Wells Fargo?
The Zacks Consensus Estimate for C’s 2026 sales and EPS implies year-over-year increases of 8.4% and 33.3%, respectively. EPS estimates for 2026 have been revised upward over the past month.
Estimate Revision Trend
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for WFC’s 2026 sales and EPS suggests year-over-year rallies of 4.7% and 8.8%, respectively. EPS estimates for 2026 have been revised downward over the past month.
Estimate Revision Trend
Image Source: Zacks Investment Research
C or WFC: Which Stock to Bet On
While Wells Fargo benefits from the removal of its asset cap, a higher dividend yield and improving balance-sheet flexibility, Citigroup appears better-positioned for stronger upside from here. The company’s restructuring is entering its final phase, divestitures are strengthening capital, and management’s focus on wealth management, IB and operational efficiency should support fee income growth and margin expansion.
Citigroup also has a stronger earnings outlook compared with Wells Fargo. Upward estimate revisions for C reinforce its improving earnings momentum, while WFC has seen downward revisions.
Therefore, despite Wells Fargo’s progress and slightly cheaper valuation, Citigroup emerges as the smarter buy for now, backed by its transformation progress, stronger projected earnings growth, improving efficiency and greater upside potential.
At present, Citigroup has a Zacks Rank #2 (Buy) and WFC carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.