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Here's How Sell-Side Analysts Responded To Wells Fargo's Cross-Sales Scam Story

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Here's How Sell-Side Analysts Responded To Wells Fargo's Cross-Sales Scam Story

Wells Fargo & Co (NYSE: WFC) was recently pulled up by regulatory agencies for allegedly opening fake savings and credit accounts without customers' volition. The misconduct was done apparently to meet an employee sales goals program the company ran, which was necessary for determining employees' financial rewards.

Most sell-side analysts who looked at the stock this week took an optimistic stance. Here is the gist of what they had to say and their ratings and price targets for the bank.

Baird Says Let Stock Thrashing Stop; Valuation Attractive

Following the 10 percent decline in the shares over the past couple of weeks, Baird's David George believes the risk/reward is now attractive, on a relative basis. The analyst believes the market's extraction of $25 billion in the company's market value, associated with a $2.6 million revenue loss, was overdone.

Baird upgraded its rating on the shares of the company to Outperform, with a price target of $50.

Related Link: Market Opinion Mixed On Timing Of Wells Fargo Bounce Back

Wells Fargo Presents Buying Opportunity —Morgan Stanley

Morgan Stanley's Betsy Graseck believes Wells Fargo offers among the best values in its group and the S&P 1500. Although there could be some volatility ahead, given that headline risks persist, the stock has rarely been this inexpensive and presents a buying opportunity.

Morgan Stanley upgraded the shares of the company to Overweight from Equal Weight, while lowering the price target to $53 from $56.

Goldman Sachs Positive On Wells Fargo

Goldman Sachs defended Wells Fargo despite recent scrutiny. "While we believe shares may remain volatile near-term, we believe WFC's dividend yield provides support to the stock and see any additional underperformance as a buying opportunity absent a material change to the company's earnings power (which we do not see at this point)," Goldman analysts led by Richard Ramsden wrote in a note.

The firm maintains its Buy rating and the $56 price target on the shares of the company.

Deutsche Bank Deems Valuation as Attractive

Following the pullback, Deutsche Bank termed the stock valuation as attractive, given that Wells Fargo is now trading at a 13 percent discount to its high-return peers.

Deutsche Bank's Matt O'Connor maintains the Buy rating he has on the shares of the company, while lowering the price target to $50 from $59.

Citi Says Company's Measures Inadequate

Citi stated that the heightened regulatory, legal and political attention suggests that the measures announced by the company might not be sufficient. "What we don't know is where this ends, be it with additional settlements/fines and/or management changes, any and all of which can be both distracting and financially costly, albeit digestible given capital adequacy and earning power," a Citi analyst said.

Citi maintains its Outperform rating on the shares of the company, while lowering its price target to $50 from $56.

Full ratings data available on Benzinga Pro.

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