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UPDATE: Nomura Initiates Coverage on Wells Fargo at Buy, Solid Performance

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In a report published Wednesday, Nomura Equity Research initiated coverage on Wells Fargo & Company (NYSE: WFC) with a Buy rating and $42.00 price target.

Nomura Equity Research noted, “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.”

Wells Fargo & Company closed on Tuesday at $34.76.

Posted-In: Nomura Equity ResearchAnalyst Color Initiation Analyst Ratings

 

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