Wells Fargo's (WFC) Still an Attractive Investment Opportunity for Evercore; 'Buy' Rating Affirmed
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Evercore still sees Wells Fargo (NYSE: WFC) as an attractive investment amid recent scandal and fallout for the institution. The firm reiterates its Buy rating and $51 price target on the stock Wednesday.
Analyst John Pancari and his team noted the following:
- [Today's clawback] announcement comes ahead of Thursday morning’s testimony to the U.S. House Financial Services Committee, where further questions re: mgmt compensation and clawbacks are again likely to be at the forefront. We note that $12M of Stumpf’s 2015 comp was in unvested RSR’s and of the $4M in bonuses, $833K was also in unvested RSR’s. Additionally, while we feel these steps are what many investors had anticipated, they do not preclude further measures by the Board, including additional clawbacks, other executives entering the crosshairs, or senior executive departures.
Still an attractive entry point into the shares from a L/T perspective. Despite the ongoing headline noise (which may persist and represent a near term overhang), we believe the financial risk is more than manageable, and with the stock trading at 11.2x 2017 EPS and 1.5x TBV vs. 11.5x and 1.3x for large cap peers, the stock presents an attractive entry point from a long term perspective in our view.
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