UPDATE: Jefferies Initiates Buy, $39 PT on Wells Fargo on ROE, Strong Capital Base

In a recent report, Jefferies said it initiated coverage on Wells Fargo

with a Buy rating and a price target of $39. Jefferies noted, "We are initiating WFC at Buy with a $39 target. Wells delivers above-average ROEs on a strong capital base, and has growth potential even at $1.3 trillion of assets. As for other banks, net interest margin pressure and tough comps in mortgage banking put us modestly below consensus for '13 ($3.55 vs. $3.64). While WFC has closed some of the valuation gap to regional peers, we see upside potential with downside protection." Wells Fargo closed at $33.05 on Friday.