Bank analyst Dick Bove raised his rating on Wells Fargo (NYSE: WFC) from sell to neutral on Thursday. The move comes just a day after the bank reported first quarter earnings that were lower than a year ago.
Bove of Rochdale Securities raised his price target for Wells Fargo from $25 to $29. The analyst said it appears Wells Fargo has solved its capital problem, but it has not solved its earnings problem beyond its successful hedging strategies, according to recent reports.
Although Bove upgraded the stock and raised his price target, the price suggests potential downside risk of more than 10 percent as shares of Wells Fargo are trading above $33 late in Thursday’s session.
The bank also said for the first quarter it holds unrealized gains of $7.4 billion on securities available for sale.
Wells Fargo reported first quarter net income of $2.55 billion or 45 cents a share, down from $3.05 billion or 56 cents a share in the same period a year earlier. Profits applicable to common shareholders totaled $2.37 billion, slightly lower than the $2.38 billion booked last year.
The bank did report that all of its business units posted profits, with community banking earnings $1.5 billion, wholesale banking earnings $1.2 billion, and brokerage and retirement earnings $282 million.
