Wells Fargo (WFC) Estimates, PT Trimmed at Piper Jaffray on Increased Provisions

While many other analysts are rushing out to defend Wells Fargo (NYSE: WFC), Piper Jaffray analyst, Kevin Barker, stands out with a contrarian call, reiterating his Neutral rating, cutting his price target and stating that consensus needs to come down.

The decline in forward estimates reflects higher provision expenses and lower fee income. He has also taken more a dovish approach to rising rates and now only models one more rate hike from the Fed down from two. His EPS estimates are 6-10% below the street.

Since the start of the year, WFC has outperformed money center banks by 5% and large cap regional banks by 3% (on average) and is now trading at a premium on earnings versus every bank over $50B in assets. The analyst believes WFC may be one of the best managed banks in the U.S., but due to material regulatory constraints it should trade to a slight discount to most non-money center banks over the long term.

No change to Neutral rating and the price target drops slightly to $50 from $51.

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 $48.82 yesterday.

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