Wells Fargo’s Target, Estimates Lifted at Compass Point (WFC)

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Banking giant Wells Fargo & Company ( WFC ) on Tuesday received some positive commentary from analysts at Compass Point Research.

The firm said it lifted its price target on WFC from $37 to $39. That new target represents a potential 18% upside to the stock's Monday closing price of $33.15.

A Compass Point analyst commented, "The increase in our price target reflects a lower risk premium as negative headlines from mortgage servicing issues appear to be largely behind the industry and credit performance continues to improve. We are increasing our 2012E from $3.24 to $3.32 and decreasing our 2013E from $3.93 to $3.87. Driving the 2012E increase is a better mortgage banking environment and our 2013E reduction is driven by higher expenses. We believe the reclass of $1.7B of home equity to nonaccrual due to nonperformance of the first mortgage is a non-event given that risk was already included in their reserving methodology."

Wells Fargo, which posted its first quarter results last week, saw its shares book modest gains in early trading Tuesday.

The Bottom Line
Shares of Wells Fargo ( WFC ) have a 2.65% dividend yield, based on last night's closing stock price of $33.15. The stock has technical support in the $28-$30 price area. If the shares can firm up, we see overhead resistance around the $34-$35 price levels.

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 The NASDAQ OMX Group, Inc.

Created by Dividend.com

This article appears in: Investing , Stocks

Referenced Stocks: WFC



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