economy
There's a great buying opportunity for this struggling bank stock, says Bank of America
Wells Fargo stock is trading at a discount to its peers, per Bank of America.
TL;DR
- Bank of America has a buy rating on Wells Fargo with a $95 price target, implying 20% upside.
- Wells Fargo shares have fallen nearly 16% year-to-date due to concerns over private credit and leveraged loan exposure.
- The analyst believes the path to an 18% return on tangible common equity is achievable and the stock's de-rating is disproportionate to fundamentals.
- Wells Fargo trades at a lower price-to-earnings and price-to-tangible book value ratio compared to when management's ROTCE targets were more fully priced in.
- Recent credit concerns are viewed as idiosyncratic, not systemic, and a rebound is expected as fears subside.
- The call aligns with the Street consensus, with 18 out of 25 analysts holding a buy or strong buy rating.