Oppenheimer Maintains Perform On Wells Fargo & Co Following 2Q:15 Results

Oppenheimer analyst Chris Kotowski came out with some commentary on Wells Fargo & Co (NYSE:WFC), after the company’s second-quarter results were in line with Kotowski’s expectations, posting EPS of $1.03, compared to the analyst’s $1.04 estimate. The analyst maintained a Perform rating on Wells Fargo stock, without suggesting a price target.

Kotowski noted, “WFC is one of the most profitable (15.8% ROTCE) banking franchises in the industry with some of the most predictable results, but this quarter was a continuation of past themes where sluggish revenues were offset by stronger credit. Pre-provision earnings were $8.8B, which by some coincidence equals the average of the trailing 14 quarters. What we did think was a key takeaway from this quarter is that 1% linkedquarter loan growth (plus an extra day) has finally seemed to translate into revenues with NII up 2.6%.”

The analyst added, “We’ve taken our estimate down for 2016 from $4.45 to $4.42. This is a nickel below consensus as we’ve built in 125 bps of reserve building which consensus has not. In short, a slight miss, but loan growth finally seems to be translating into revenue growth.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Chris Kotowski has a total average return of 3.6% and a 70.3% success rate. Kotowski has a 6.9% average return when recommending WFC, and is ranked #730 out of 3708 analysts.

Out of the 21 analysts polled by TipRanks, 8 rate Wells Fargo & Company stock a Buy, 11 rate the stock a Hold and 2 recommend Sell. With a downside potential of 0.9%, the stock’s consensus target price stands at $56.74.

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