Financial services giant Wells Fargo & Company (WFC) was upgraded on Monday by analysts at Stifel Nicolaus due to its strong management and profitability.
The analysts upgraded WFC from “Hold” to “Buy” and see shares reaching $42. This target suggests a 20% upside to Friday’s closing price of $34.88.
A Stifel Nicolaus analyst noted, “The historical P/E mulitples for our large cap bank universe range between 10.0.x-12.0x forward earnings. We believe WFC’s strong management team, superior profitabilty and high quality franchise warrants at least the mid-point of this range. We arrive at our $42 target price by applying a 11.0x multiple to our 2014 estimate of $3.83.”
Wells Fargo shares were up slightly during pre-market trading on Monday. The stock is up about +15% over the past year.
The Bottom Line
Shares of Wells Fargo (WFC) have a dividend yield of 2.87% based on Friday’s closing price of $34.88 and the company’s annualized dividend payout of $1.00 per share.
Wells Fargo & Company (WFC) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.