Bargain Alert: Wells Fargo and Goldman Sachs Look Deeply Oversold

Key Points

• Shares of Wells Fargo and Goldman Sachs have fallen sharply in recent weeks after disappointing earnings earlier in the year and a broader market shift toward risk-off assets.
• Both stocks are now trading well below recent analyst price targets, which call for meaningful upside from current levels.
• With technical indicators showing extremely oversold conditions and earnings due next month, both banks may be setting up for a recovery rally.

Financial stocks have faced a difficult stretch in recent weeks. Rising geopolitical tensions have rattled global markets and pushed investors toward safer assets, while concerns about the durability of growth in the banking space have weighed on the financials sector.

That shift comes despite banks delivering a stellar performance throughout much of 2025. However, sentiment can change quickly in this market. Two of the biggest names caught in the selloff are Wells Fargo & Co NYSE: WFC and Goldman Sachs Group Inc NYSE: GS. Both stocks have fallen around 20% from recent highs and are trading at extremely oversold levels. But there's a growing argument that the market may have overdone it—let's jump in and take a look at the opportunity opening up in each one. 

Wells Fargo Looks Extremely Oversold

Wells Fargo has endured a particularly difficult start to the year. The stock has fallen more than 20% since early January and was printing fresh lows in mid-March as investors reacted to a combination of company-specific concerns and broader market pressure.

Much of that weakness stems from the bank's most recent earnings report.

Wells Fargo missed expectations on both revenue and earnings in January, disappointing investors who had grown accustomed to strong results during the banking sector's rally in 2025.

Wells Fargo also continues to face operational challenges. Its efficiency ratio remains relatively high compared with peers, which is limiting the company's ability to deliver the kind of margin expansion that investors typically look for in large financial institutions.

Adding to the pressure this week were reports that Wells Fargo was among several Wall Street lenders most exposed to the failed U.K. mortgage finance firm Market Financial Solutions. While the ultimate financial impact remains unclear, the headline risk was enough to add to the stock's woes.

Is an Opportunity Opening Up? 

Yet the sharp decline has left Wells Fargo extremely oversold on a technical basis. The stock's relative strength index (RSI) has dropped into deeply oversold territory, a level that can often precede a period of consolidation, if not an outright bounce. 

Wall Street analysts also appear to be seeing the recent weakness as an opportunity rather than a warning sign. Evercore reiterated its Outperform rating on the stock last week, while UBS maintained a Buy rating in recent coverage. The latter's price target of roughly $113 implies as much as 50% upside from current levels. 

For investors considering getting involved, the key will be whether Wells Fargo can find a floor after the recent selloff and this week's fresh lows. If shares can begin to consolidate in the coming sessions, a recovery rally into next month's earnings report could quickly take shape.

Goldman Sachs May Also Be Due for a Bounce

Goldman Sachs has experienced a similar decline in recent months. The bank's shares have dropped roughly 20% since January as investors have reassessed the potential for growth after last year's 60% gain. 

Part of that weakness also stems from the company's last earnings report. Goldman missed revenue expectations in January, raising concerns about the strength of its investment banking and trading businesses in a more volatile market environment.

The bank's valuation has also drawn scrutiny. Goldman Sachs has traded at a premium relative to its peers, making the stock particularly vulnerable to a negative shift in sentiment. That decline has now pushed Goldman Sachs into technically oversold territory, with the stock's RSI falling to levels that could soon signal exhaustion. 

Why the Market May Be Overreacting

Despite the recent pullback, however, analysts remain broadly bullish on the company's outlook. JPMorgan recently raised its price target on Goldman Sachs to $826, a level well above the stock's current trading range around $790. That projection suggests the market may be undervaluing Goldman Sachs after its recent slide. If capital markets activity stabilizes or improves later this year, the company could benefit significantly, given its dominant position in investment banking and trading.

For investors watching the stock, the key question now is whether, as with Wells Fargo, Goldman Sachs shares can find a floor. With sentiment across the banking sector already heavily depressed and technical indicators pointing to extremely oversold conditions, the ingredients for some consolidation and a potential relief rally are starting to build.

Next month's earnings report could become the catalyst that shifts the narrative. Don't be surprised if the stock starts to grind higher before the report, where any signs that growth is stabilizing could see the comeback really gather momentum.