Collins Stewart analyst Todd Hagerman lifted his rating on Wells shares to buy from hold on Monday, saying its "cheap earnings multiple will find new life" once the firm beats expectations on April 21, when the results are announced. He's expected the company to post earnings of 50 cents a share for the March quarter versus Wall Street's current consensus estimate of 41 cents a share for the period.
Hagerman believes there are several factors at play that will boost Wells' shares, including better-than-expected credit metrics, and its proven ability to out-earn even its internal estimates. He estimates that Wells is trading at about eight times its estimated 2012 earnings vs. an average of 12 times 2012 earnings for its large-cap peers.
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