Mortgage Gain on Sale marginWells Fargo's gain on sale margin for mortgage loans sold during the first quarter was 2.56%, which matched the record margin for the fourth quarter. But this is a delayed indicator for the company, as it recognizes loan sales when they actually occur, rather than when the new mortgage loan has its rate "locked," as most other large banks do.
Plenty of LoveDespite his neutral rating on the shares and estimate for a slight earnings decline next year, Staite acknowledged that "WFC is a highly profitable bank currently generating a 16.9%
- KBW analyst Christopher Mutascio on Sunday reiterated his "outperform" rating for Wells Fargo, while raising his 2013 earnings estimate for the company to $3.74 from $3.59, and his 2014 EPS estimate to $3.93 from $3.83. The analyst said in a note to clients that credit quality improvement was the driving factor in the higher earnings estimates.
- Jefferies analyst Ken Usdin maintained his "buy" rating for Wells Faro, with a price target of $42, while raising his 2013 EPS to $3.70 from $3.60, and his 2014 EPS estimate to $3.75 from $3.70. Usdin said in a report that "A lower loan loss provision is the primary driver of our revisions."
- FBR analyst Paul Miller maintained his "outperform" rating on Wells Fargo, while raising his price target for the shares to $49 from $39.00. Miller stuck with his 2013 EPS estimate of $3.65, but raising his 2014 EPS estimate to $4.00 from $3.90. The analyst said in a client note that the higher price target "Our new price target represents 11.5x FY13E earnings of $3.65, a slight premium to peers trading at 11.1x," he wrote. Miller added "we view Wells Fargo as one of the best positioned to weather the current environment as its resilient balance sheet and mortgage banking platform continue to offset the effects of low rates and continued de-leveraging, factors that are haunting other banks."
- Sterne Agee analyst Todd Hagerman reiterated his "buy" rating for Wells Fargo, while raising his price target for the shares to $42 from $41, and maintaining his 2013 EPS estimate of $3.65 and hi 2014 EPS estimate of $4.00. Hagerman said in a report that "earnings momentum remains sluggish," but added that "while a fair amount of the EPS slowdown is
discountedin the stock, we see positiveEPS leverage on the expense side post the regulatory settlements and further declines in repurchase requests."
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