Credit Suisse Upgrades Wells Fargo (WFC) to Outperform
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Credit Suisse analyst Susan Roth Katzke upgraded Wells Fargo (NYSE: WFC) from Neutral to Outperform with a price target of $40.00 (from $35.00).
The analyst comments "We’re raising our rating on Wells Fargo to Outperform from Neutral. Simply put, we asked for targets and supporting disclosure to increase clarity on the path to improved returns; both were delivered with fourth quarter results. To be sure, the path forward has its obstacles and revenue growth remains a challenge, but the combination of evident progress, incremental investment, excess capital and the inherent franchise opportunity reduce the downside risk and render the aspiration of a 15% ROTE achievable, in time. Near term, considering both a lower loss rate trajectory and a lower net interest revenue guide, we’re raising our 2021 estimate to $2.30 from $2.10 and trimming 2022 to $3.20 from $3.40 per share; our target price increases to $40 from $35 with capital accumulation and clarity on the expense trajectory. Risks to achievement of our estimates and target price tie to both the macro/economic recovery (the level of interest rates, loan demand, credit quality/CRE in particular, capital markets) and the micro, with earning power compromised by consent orders, revenue growth challenges and the need to invest in support of cost savings and competitive positioning."
Shares of Wells Fargo closed at $31.89 yesterday.
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