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 $10 to $52, 10.2x our 2024 EPS estimate, below the three-year historic average of 11.7x given stagnant growth expectations. We decrease our 2023 EPS view by $0.05 to $5.19 and raise 2024’s by $0.04 to $5.12. After trading relatively flat through the first 10 months of 2023, shares have surged in recent weeks and now sit 21% higher for the year. Still, we view the recent rally as reasonable as falling long-term interest rates and decreasing recessionary odds justify a higher multiple, in our view. WFC is more exposed to commercial real estate office loans (3.4% of total loans) than its large bank peers and clear credit deterioration has been identified in recent quarters with further degradation expected in Q4. However, our expectations for credit quality in 2024 and 2025 have improved as a lower expected rate environment should lead to fewer defaults given more manageable debt payments. However, we remain at Hold as WFC’s asset cap stifles upside potential on shares.