Wells Fargo Now a “Conviction Buy” at Goldman Sachs (WFC)

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Banking giant Wells Fargo & Company ( WFC ) on Friday saw its rating, price target, and earnings estimates all boosted by analysts at Goldman Sachs.

The firm said it upgraded WFC from "Neutral" to "Conviction Buy," and raised its price target from $36 to $38. That new target implies a 21% upside to the stock's Thursday closing price of $31.44.

Goldman also raised its 2011 earnings estimate for WFC to $2.90 per share, and moved its 2012 estimate up to $3.80 per share.

The analyst noted the company's expenses are stabilizing and could see higher operating leverage in coming quarters as a result. Goldman also thinks WFC could significantly boost its dividend and announce a large share buyback this year.

Wells Fargo shares rose 85 cents, or +2.7%, in premarket trading Friday.

The Bottom Line
Shares of Wells Fargo ( WFC ) have a .64% dividend yield, based on last night's closing stock price of $31.44. The stock has technical support in the $28 price area. If the shares can build momentum on this morning's upgrade, we see overhead resistance around the $40 price level.

Wells Fargo & Company ( WFC ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.3 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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