This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Wells Fargo Upgraded by FBR

Stocks in this article: WFC BAC JPM PNC

NEW YORK ( TheStreet) -- Saying the stock's valuation was "too attractive to ignore," FBR analyst Paul Miller on Tuesday upgraded his rating for Wells Fargo (WFC) to "Outperform" with a price target of $31.00.

Miller's target would be a 35% gain from Monday's closing price of $22.93. Wells Fargo's shares declined 9% on Monday, following last week's 9% decline.

Bank of America (BAC) led the largest U.S. banking names down, as its shares dropped 20% to close at $6.51. Miller continues to rate the nation's largest bank holding company "Outperform" with a price target of $12.00.

The analyst said that Wells Fargo was replacing PNC Financial Services (PNC) among his firm's "top picks" in the banking space, although PNC continues to be rated "Outperform" by FBR, with a $70 price target.

Miller said the Wells Fargo upgrade "presumes that bank investors will flock to quality names that can best weather the adverse effect of a flattening yield curve," and that "the company's strong deposit franchise, diverse business lines, and solid mortgage origination platform position it well to sustain a healthy" net interest margin, with "77% of its funding base coming from core Deposits."

A bank's net interest margin is the spread between a bank's average yield on loans and investments and its average cost for deposits and wholesale borrowings.

The analyst also touted Wells Fargo's "decline in non-interest operating expenses, coupled with lower net interest income, which offset lower mortgage banking income." Factoring in "historically low mortgage interest rates and a seasonally strong third quarter," Miller expects the company to "show some strength this quarter compared to the first two quarters of this year."

Wells Fargo's shares are at a low forward P/E of seven times Miller's 2012 earnings estimate of $3.25 a share.

Miller also rates JPMorgan Chase (JPM) "Outperform," with a price target of $56.00, which would be a 64% gain from Monday's closing price of $34.06. JPMorgan saw its shares drop 9% Monday, after last week's 7% decline.


-- Written by Philip van Doorn in Jupiter, Fla.

To contact the writer, click here: Philip van Doorn.

To follow the writer on Twitter, go to

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs