Jim Cramer reveals his favourite after day 1 of bank earnings

Wells Fargo & Co (NYSE: WFC) reported lower-than-expected profit for its fiscal third quarter on Friday. Shares still closed the regular session up about 2.0%.

Cramer picks Wells Fargo over rivals

Nonetheless, its results were strong enough to make a famed investor – Jim Cramer reiterate that this stock was worth owning. This morning on CNBC’s “Squawk Box”, he said:

He expects the multinational to continue reporting great quarters moving forward. Other bright spots in the earnings report include a 36% annualised increase in net interest income and delinquencies at a historic low.

Wells Fargo Q3 earnings snapshot

• Net income printed at $3.528 billion versus the year-ago $5.122 billion
• Per-share earnings fell significantly from $1.17 to 85 cents
• Revenue went up 4.0% on a year-over-year basis to $19.505 billion
• FactSet consensus was $1.09 of EPS on $18.775 billion in revenue
• Set aside $784 million in reserves; noninterest income was down 25%

CEO Charlie Scharf attributed the lower-than-expected profit to $2.0 billion charge primarily related to litigation and regulatory affairs.

Wall Street recommends that you invest in Wells Fargo stock. The average price target on it represents a 20% upside from here.