Wells Fargo gains a bull after dividend cut, reserve build
Jul. 15, 2020 8:01 AM ET|About: Wells Fargo & Company (WFC)|By: Liz Kiesche, SA News Editor
Evercore ISI analyst John Pancari upgrades Wells Fargo (NYSE:WFC) to Outperform from In Line as the bank’s slashed dividend and bolstered reserves “help clear the decks on capital & credit uncertainty.”
WFC gains 2.4% in premarket trading.
Pending cost-cutting also “bodes well for earnings power,” he writes. CEO Charlie Scharf suggests on WFC’s call that expense savings will start in H2 2020.
“The battle is likely to be a long one and revenue headwinds remain a lingering factor, but we believe the tide is turning on Wells fundamentals — and at just 0.76x TBV and 9.4x 2021 EPS, the valuation offers a compelling entry point,” Pancari writes.
His Outperform rating is more bullish than Quant rating and Wall Street analysts’ average rating, which are both Neutral.
WFC’s stock performance lags S&P 500 and the SPDR S&P Bank ETF (NYSEARCA:KBE) during the past five years:
From other sites
- Still premature to jump onboard Wells Fargo stock: Analyst Video at CNBC.com (Wed, 3:14AM)
- Watch CNBC’s full interview with Wells Fargo CFO John Shrewsberry Video at CNBC.com (Tue, 4:28PM)
- Wells Fargo tumbles, but Citigroup and JPMorgan shares jumpâFive market experts on what to expect now Video at CNBC.com (Tue, 2:15PM)
- Stocks making the biggest moves midday: Wells Fargo, Netflix, Ford, Moderna and more Video at CNBC.com (Tue, 11:47AM)
- Wells Fargo shares tumble 8% after posting $2.4 billion loss, dividend slashed to 10 cents Video at CNBC.com (Tue, 10:12AM)
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