WASHINGTON (TheStreet) -- With Wells Fargo (WFC) becoming "more active in acquisitions as an additional driver of earnings growth," JPMorgan Securities analyst Vivek Juneja sees a bargain for investors.
The analyst's 12-month price target for Wells Fargo is $41, which implies 59% upside potential for the shares, and is based on a valuation of twice the company's estimate tangible book value at the end of 2012, versus a "peer group multiple of 1.5x tangible book value."
Junega expects Wells Fargo to continue trading at a premium to its peers, "because of its strong track record.
According to data provided by SNL Financial, Wells Fargo has certainly beaten the remaining members of the "big four" U.S. bank club, with operating returns on average assets (ROA) ranging between 1.12% and 1.29% over the past five quarters.Here's how the remaining members of the "big four" group stack up:
- For Bank of America (BAC) the ROA over the past five quarters has ranged from a negative 1.51% in the second quarter, when the company posted a net loss of $9.1 billion, springing from a $14.5 billion loss in its Consumer Real Estate division as it tried to put mortgage putback demands behind it, to a positive ROA of 1.08% in the third quarter.
- For JPMorgan Chase (JPM), the ROA over the past five quarters has ranged between 0.76% and 1.06%.
- Citigroup's (C) ROA has ranged between 0.28% and 0.76% over the past five quarters.
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