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LivestreamMenuWells Fargo shares are trading at a discount as concerns about its business swirl, but with the stock likely to rebound, it provides “an attractive buying opportunity,” according to Bank of America. The bank has a buy rating on Wells Fargo, with a $95 price target on shares, which implies 20% upside from Tuesday’s close. “Today, valuation … likely reflects rising skepticism around execution,” Ebrahim Poonawala said Wednesday in a note to clients. Wells Fargo shares have fallen nearly 16% in 2026. The decline comes as investors weigh the bank’s exposure to the private credit and leveraged loan markets, which have come under considerable pressure this year. “Our analysis suggests that the path to 18% [return on tangible common equity] (potentially by 2028) is more achievable than current sentiment implies, and the degree of de-rating appears disproportionate to underlying fundamentals,” the analyst said. Wells Fargo is trading at 10.1x price to earnings ratio based on 2027 estimates, he said. It is also trading at 1.7x price to tangible book value, or well below the 2.2x ratio hit in December “when the market was more than pricing in management’s 17% to 18% ROTCE target,” according to Poonawala. WFC YTD mountain Shares are down roughly 16% in the year to date. Bank of America expects Wells Fargo shares could rebound as fears over credit prove overblown. “Recent credit concerns tied to a handful of larger exposures appear idiosyncratic rather than systemic; while a few clean quarters may be needed to rebuild confidence, we do not view this as warranting a structural valuation discount,” Poonawala wrote. Bank of America’s call is in line with consensus on the Street. Of the 25 analysts covering Wells Fargo, 18 have a buy or strong buy on the stock, LSEG data shows.Read More
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