Wells Fargo (WFC) Added to Baird's Fresh Pick List
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Baird analyst David George reiterated an Outperform rating and $35.00 price target on Wells Fargo (NYSE: WFC) on the belief that the risk/reward looks very compelling for contrarian investors. The stock was also added to the Baird Fresh Pick list as a bullish call. He offered the following points:
- NII expectations have been reset and should stabilize and improve with more flexibility to grow the balance sheet and/or steepening in the yield curve.
- Given strong existing reserve levels (ACL/loans 2.19% in Q220) and improvement in the macro outlook, reserve build should be limited moving forward.
- The company is working hard to remediate its 12 outstanding consent orders and exit the Fed’s balance sheet cap.
- The management team recognizes that expenses are too high, ~$10B of expense cuts previously referenced to reach the peer efficiency ratio informs the business planning process and how the company is thinking about getting to best-in-class performance.
Shares of Wells Fargo closed at $22.81 yesterday.
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Related EntitiesRobert W Baird, Wells Fargo
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