Banking giant Wells Fargo & Company (
) 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 (
) 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 (
) is not recommended at this time, holding a Dividend.com DARS™
Rating of 3.3 out of 5 stars.
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, as well as a detailed explanation of
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