Ahead Of Wells Fargo's Q3 Report, This Senior Analyst Maintains A Buy

Argus Research's Senior Analyst Steve Biggar maintained his Buy rating on shares of Wells Fargo & Co WFC ahead of its earnings release. The company is set to report its third quarter results before the markets open on Friday.

Analysts, on average, expect the bank to report earnings of $1.01 per share on revenues of $22.22 billion.

Wells Fargo found itself in the center of a storm in September, as it was pulled up by regulatory agencies for allegedly opening fake savings and credit accounts without customers' volition. The misconduct was done apparently to meet employee sales goals program the company ran, which was necessary for determining employees' financial rewards.

Related Link: Dick Bove Is Bearish On Wells Fargo

The stock has lost roughly 10 percent since then. Biggar believes the stock would rebound, as the company has terrific return numbers, namely ROE and ROA, relative to peer group. The analyst also sees good earnings growth and good presence in a lot of markets, including mortgages.

Conceding that the scandal will have a spillover effect in terms of regulation and more oversight, Argus said it expects some short-term fall off. The firm also expressed its view that cross selling is still a viable business model, helping consumers avoid fees.