NEW YORK ( TheStreet) -- Wells Fargo (WFC - Get Report) is "best positioned of any bank" to benefit from sooner-than-expected tightening of monetary policy by the Federal Reserve and "a renewed desire by the government to aid housing," argued Rafferty Capital Markets analyst Dick Bove in a report published Thursday
Bove lifted his Wells Fargo price target to $58.50 from $51.50. Shares were up 0.36% Thursday to $49.85, slightly shy of their 52 week high of $50.49 reached April 4.
Fannie Mae (FNMA) and Freddie Mac (FMCC) recently announced they are easing up on the standards that must be met for banks to avoid future legal claims.
"There is no company in the country better positioned to take advantage of the shift in government mortgage policies. The internal adjustments made by the bank in pricing servicing and in the cost of originating loans suggest that mortgage activity will be a big source of company income very soon," Bove wrote.
Bove's report is one of the most bullish to emerge from the San Francisco-based banking giant's investor day earlier this week. He conceded his takeaway from the presentations were "mainly intangible." Among them: "The company has created a culture that results in the development of long-tenured employees with a deep knowledge of the bank's product array," and "it is everywhere in the country with every financial product."
Most analysts left price targets unchanged following the presentation.
Deutsche Bank analyst Matt O'Connor, who rates Wells Fargo a "hold," had no problems with the presentation but is concerned about growth in the overall economy.
"We wonder how much GDP growth can accelerate if consumer under-writing standards remain tight, growth remains sluggish at the biggest banks, and the Fed continues to dial back asset purchases," O'Connor wrote.
Nonetheless, O'Connor said he believes Wells Fargo is "well-positioned vs. most peers for higher interest rates."
Billions More in Mortgage Penalties Coming: Federal Regulator
Fannie, Freddie Bull Ackman Steers Clear of D.C. Fight
-- Written by Dan Freed