We’re hiking our Wells Fargo price target after the stock surged on earnings
Editor’s note: Check back shortly for a full look at our earnings analysis. Wells Fargo extended its recent winning streak to six straight sessions Friday despite missed expectations on third-quarter revenue. Investors focused instead on the bank running leaner and generating better-than-expected profitability. Total revenue for the three months ended Sept. 30 fell 2.4% versus last year, to $20.37 billion, missing analysts’ expectations of $20.42 billion, according to LSEG. Wells Fargo reported results before Friday’s opening bell. Earnings of $1.52 per share, however, was above Wall Street’s consensus estimate of $1.28 per share, LSEG data showed. Adjusted EPS excluded a 10-cent-per-share hit due to “losses on debt securities related to a repositioning of the investment securities portfolio.” That said, even before the adjustment, the reported EPS of $1.42, still looks good versus expectations. WFC YTD mountain Wells Fargo YTD Shares of Wells Fargo surged 6% on the release to more than $61. That’s just shy of their 52-week high of $62.55 back in May, which was also the highest level since January 2018. Bottom line We’re raising our price target on the stock to $66 per share from $62 and reiterating our buy-equivalent 1 rating . The reasons are three-fold: We like the efficiency gains at the bank; the progress being made to get the Federal Reserve-imposed asset cap lifted; and the optimistic outlook for the economy and inflation. (Jim Cramer’s Charitable Trust is long WFC. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
