Jefferies Downgrades Wells Fargo (WFC) to Hold

November 28, 2016 7:43 AM EST
Get Alerts WFC Hot Sheet
Price: $54.25 -1.49%

Rating Summary:
    12 Buy, 18 Hold, 8 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 24 | Down: 17 | New: 14
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Jefferies downgraded Wells Fargo (NYSE: WFC) from Buy to Hold with a price target of $58.00 (from $50.00) to reflect post-election stock/EPS dynamics.

Analyst Ken Usdin commented, "Although WFC underperformed peers by 3% since the election, shares saw a +15% move in the rally. We see a decent EPS pickup in our Bull scenario (+19% vs. peers at +22%) and a nice ROTCE improvement to boot (15% vs. our current est. of 13%) from lower taxes and help from rates, but with some mortgage banking offsets. WFC shares currently trade at 10x our Bull scenario (vs. 11x for peers), a discount that may linger until the sales practices situation is clearly put behind. Upside potential to our target of $58 is just shy of a Buy rating and implies shares trade at 13.5 our current '18 EPS estimate of $4.35. Upside risks to our downgrade: tighter cost controls emerge, quicker deployment of excess liquidity."

For an analyst ratings summary and ratings history on Wells Fargo click here. For more ratings news on Wells Fargo click here.

Shares of Wells Fargo closed at $52.62 yesterday.

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