Wells Fargo's "plans are constantly updated around optimizing staffing levels, but timing might modestly lag a decline in originations," Usdin wrote, hinting at significant staff reduction if mortgage volumes decline as expected.
Hagerman estimates Wells Fargo will earn $3.65 a share this year, with EPS growing to $4.00 in 2014.
"To be sure, the company's top-tier profitability metrics (an estimated +16% ROTCE and 1.34% ROAA in 2013E), balanced revenue stream, and relatively benign risk profile are deserving of a premium valuation," Hagerman wrote. But he sees limited upside for the stock, "given expectations for more modest earnings growth into '14."
Wells Fargo would need to increase its annual earnings to $4.75 "to rationalize material upside to the current price target," according to Hagerman. But he doesn't expect earnings to reach that level until 2015, "at the earliest.""While we consider WFC a high-quality, core holding for investors (company continues to redeploy 50-60% of earnings via dividends and share repurchases), meaningful outperformance of WFC shares at this juncture seems unlikely," he wrote. WFC data by YCharts
Interested in more on Wells Fargo? See TheStreet Ratings' report card for this stock. -- Written by Philip van Doorn in Jupiter, Fla. >Contact by Email. Follow @PhilipvanDoorn