Stifel Nicolaus Reiterates Buy, $40 PT on Wells Fargo, Raises Estimates
Stifel Nicolaus maintains its Buy rating and $40 price target on Wells Fargo & Company (NYSE: WFC) and raises its estimates to reflect higher mortgage banking revenue assumptions.
Stifel comments, “We are raising our 4Q11 EPS estimate to $0.75 from $0.72 and our 2011 EPS estimate to $2.84 from $2.81. … We look at the average unclosed pipeline from 2Q10 through 4Q10 of $81 billion as a similar environment as the 3Q11 unclosed pipeline of $84 billion (see Figure 1). The average mortgage banking income from 3Q10 through 1Q11 (one quarter lag from the 2Q10 through 4Q10 unclosed pipeline) is $2.42 billion. As such, we are raising our 4Q11 mortgage banking income estimate to $2.40 billion from $1.96 billion.”
WFC closed at 23.51 per share on Friday.
