Nomura Securities Initiates Coverage of Wells Fargo (WFC)

Nomura Securities Initiates Coverage of Wells Fargo (WFC)


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 DARS™ Rating of 3.4 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.

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