Wells Fargo & Co (NYSE:WFC) is in the spotlight today after Brian Kleinhanzl of Keefe Bruyette upgraded the bank to ‘Outperform’ from ‘Market Perform’. The analyst also raised his price target to $63 per share from the previous $53. As reason for the upgrade, Kleinhanzl believes the cloud of uncertainty surrounding Wells Fargo’s previous cross selling scandal has been reduced due to the bank settling class action lawsuits concerning the matter. Just yesterday, Wells Fargo CEO Timothy J. Sloan disclosed in a letter that the bank has refunded approximately $3.2 million to approximately 130,000 retail and small business accounts and that the bank has also agreed to a preliminary $110 million class action settlement that will go toward further customer refund concerning unauthorized account openings.
Although Wells Fargo & Co (NYSE:WFC)’s new bank account openings have slowed substantially due to the scandal, many on Wall Street believe customers will forgive Wells eventually. Given that Wells Fargo is still profitable, and will benefit from the strong economy and the coming interest rate hikes, Wells Fargo remains a good holding in the eyes of many financial professionals.
What Does The Smart Money Sentiment Say?
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According to our data, 100 top funds were long Wells Fargo & Co (NYSE:WFC) at the end of December, down 4 funds from the previous quarter. (That’s out of the 742 elite funds in total in our database) Of the various smart money holders in Wells Fargo, none are more important than Warren Buffett‘s Berkshire Hathaway, which currently owns around 10% of the bank. Buffett has owned Wells Fargo for a long time and has maintained his holding even through the bank’s unauthorized account opening scandal. Buffett’s steady ownership gives confidence to many investors that Wells Fargo will continue to be a dependable generator of dividends and returns going forward.
The Bottom Line
Wells Fargo & Co (NYSE:WFC) is once again in the spotlight after Keefe Bruyette upgraded the stock. For those of you interested also read ‘7 Banks That Offer Free Checking Accounts With No Minimum Balance‘.