Nomura Securities reported on Wednesday that they have begun coverage of financial services company, Wells Fargo & Company(WFC).
The firm has initiated coverage on WFC with a “Buy” rating and $42 price target. This price target suggests a 17% increase from the stock’s current price of $34.89.
An analyst from the firm commented, “Wells Fargo & Company is a consistently solid performer with a top-shelf franchise (13% ROE and 1.4% ROA in 2012 and 12 consecutive quarters of record earnings). We think EPS will grow at a mid- to high-single-digit pace in the next two years as NII grows, expenses head lower and credit costs continue to improve. Shareholders will be rewarded with capital returns, including a ~3% dividend yield and share buybacks. While we expect mortgage activity to again be strong in 2013, we have baked in a 25% decline in mortgage banking income for 2013 and a 23% decline in 2014, which might prove conservative. We believe valuation is attractive at 9x 2014E. FY13E EPS at $3.66; FY14E EPS at $3.88.”
Wells Fargo shares were mostly flat during Wednesday morning trading. The stock has increased 15.6% in the past year.
The Bottom Line
Shares of Wells Fargo & Company(WFC) have a 2.87% yield, based on Wednesday morning’s price of $34.89.
Wells Fargo & Company(WFC) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.
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