CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We increase our target price by $11 to $70, 12.0x our 2025 EPS estimate, below the 10-year historic average of 15.3x given modest growth expectations. We raise our 2024 EPS view by $0.11 to $5.11 and increase 2025’s by $0.43 to $5.82. WFC posted Q1 EPS of $1.20 vs. $1.23, $0.11 above consensus on revenue of $20.9 billion. Our improved opinion of WFC reflects expectations for net interest income (NII) outperformance as rate cut expectations continue to get pushed back. We view management’s NII guidance (7%-9% lower in 2024) as conservative and see upside as asset yields reprise higher. In Q1, noninterest income jumped 17% Y/Y on a 92% explosion in investment banking fees given increased industry activity. We were also encouraged by the bank’s credit quality as net charge-offs fell 3 bps sequentially to 0.50%. Perhaps more important, WFC is continuing to cut its commercial real estate office exposure (-15% Y/Y) and management highlighted that it did not see office credit deterioration in the quarter.