Jefferies Downgrades Wells Fargo (WFC) to Hold
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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."
Shares of Wells Fargo closed at $52.62 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst PT Change, Downgrades
Related EntitiesJefferies & Co, Wells Fargo
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