On Monday, Piper Sandler showed a modest increase in optimism for Wells Fargo & Co (NYSE:WFC), adjusting the bank's price target to $62 from $60 while maintaining a neutral position on the stock.
The revision follows Wells Fargo's third-quarter earnings and updated guidance for the coming years.
The financial firm's analyst cited the bank's solid performance in the third quarter and anticipated carryover into the fourth quarter of 2024 as reasons for the updated earnings per share (EPS) estimates. The 2024 estimated EPS has been increased from $5.01 to $5.34. Additionally, the 2025 EPS forecast has been marginally raised from $5.17 to $5.20. Piper Sandler also introduced an estimated EPS of $5.80 for 2026.
The price target enhancement is based on the minimal changes to the EPS expectations, which are still approximately 12 times the estimated 2025 earnings but have been fine-tuned higher. Despite the new price target, the analyst has chosen to keep a neutral rating on Wells Fargo shares.
"We are keeping our Neutral rating, but note that the story becomes more interesting as NII begins to find its bottom, the fee base gains momentum, and regulatory issues seem to move forward," said the analysts.
In other recent news, analysts from Baird, Barclays, and Evercore ISI have positively adjusted their outlooks on Wells Fargo, citing strong EPS performance and a promising outlook for 2025. However, JPMorgan maintained a neutral stance, highlighting a significant drop in the bank's net interest income (NII).
In the midst of these updates, Evercore ISI revised upwards its EPS estimates for 2025 and 2026 for Wells Fargo, marking a 4% increase from the previous estimates.
InvestingPro Insights
Recent data from InvestingPro adds depth to Piper Sandler's analysis of Wells Fargo & Co (NYSE:WFC). The bank's market capitalization stands at $204.04 billion, reflecting its significant presence in the financial sector. Wells Fargo's P/E ratio of 12.74 aligns with the analyst's valuation approach of approximately 12 times estimated 2025 earnings.
InvestingPro Tips highlight that Wells Fargo has maintained dividend payments for 54 consecutive years, underscoring its financial stability and commitment to shareholder returns. This consistency in dividends complements the bank's solid performance noted in the article. Additionally, the tip that management has been aggressively buying back shares suggests confidence in the company's future prospects, potentially supporting the stock's valuation.
The bank's revenue for the last twelve months as of Q3 2024 was $77.88 billion, with a modest growth of 1.81%. This data point provides context to the analyst's observations about Wells Fargo's performance and future earnings potential.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Wells Fargo, providing a deeper understanding of the company's financial health and market position.
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