Wells Fargo & Company (WFC)’s Risk/Reward Looks Compelling, Says BofA

Wells Fargo & Company (NYSE:WFC) is among the most profitable US stocks to buy. On January 7, BofA Securities increased its price target on Wells Fargo & Company (NYSE:WFC) to $107 from $100 with an unchanged ‘Buy’ rating on the stock. Ebrahim Poonawala, an analyst at the firm, pointed out that the company’s current valuation is discounted relative to its peers, offering an attractive risk/reward profile.

BofA Securities suggested this valuation gap could narrow in the times ahead if the company’s management achieves superior revenue growth, backed by massive franchise investments already made, while maintaining profitability. The firm also highlighted that growing confidence in execution would enable investors to pay a premium for Wells Fargo & Company (NYSE:WFC) over some other leading regional banks, noting the bank’s scale advantage and what it describes as “best-in-class execution” under the leadership of CEO Charlie Scharf.

Earlier on January 6, Baird downgraded Wells Fargo & Company (NYSE:WFC) to Underperform from Neutral and set a price target of $90, which is slightly above the lowest 1-year price target on the street. Despite the company’s solid business model, the firm believes that market sentiment has become overly optimistic, with the stock trading at nearly 13.5 times projected EPS for 2026.

Wells Fargo & Company (NYSE:WFC), headquartered in San Francisco, is a financial services company incorporated in 1852. With four main segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth and Investment Management, the company considers satisfying the clients’ financial needs as its mission.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

Disclosure: None.