Analyst Ebrahim Poonawala from Bank of America Securities reiterated a Buy rating on Wells Fargo and keeping the price target at $92.00.
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Ebrahim Poonawala has given his Buy rating due to a combination of factors that highlight Wells Fargo’s strong potential for future growth and profitability. Despite a recent stock sell-off, which was more about investor positioning than company fundamentals, Wells Fargo’s second-quarter earnings per share exceeded expectations. The lowered net interest income guidance for FY25 was attributed to growth in the markets business, but the overall outlook remains positive with expected sequential growth in the latter half of the year.
Furthermore, the management’s commitment to improving profitability without sacrificing returns was reaffirmed by CEO Charlie Scharf. The bank is expected to achieve a higher return on tangible common equity by FY27, driven by opportunities to enhance productivity and expand market share in various sectors. Additionally, Wells Fargo’s solid capital levels provide flexibility for organic growth and share buybacks, which could lead to positive revisions if credit conditions remain stable. These factors contribute to the attractive risk/reward profile that supports the Buy rating and the price objective of $92.
According to TipRanks, Poonawala is a 5-star analyst with an average return of 13.4% and a 70.65% success rate. Poonawala covers the Financial sector, focusing on stocks such as JPMorgan Chase, Goldman Sachs Group, and BNY.
In another report released today, Barclays also maintained a Buy rating on the stock with a $87.00 price target.