Morgan Stanley raised Wells Fargo's rating from “hold and wait” to “increase holdings,” and set the target price at 102 US dollars, believing that the balance between the bank's growth and profitability is improving. The agency pointed out that after the asset cap was lifted, Wells Fargo's balance sheet expansion once depressed net interest spreads due to increased business assets and rising financing costs in low-yield markets, but profit performance is expected to improve as the pace of expansion slows, existing customer relationships contribute more revenue, and operating leverage continues. Morgan Stanley expects Wells Fargo's net interest spread to remain around 2.42% until the first quarter of 2027, then rise to 2.49% in the fourth quarter of 2027; the return on tangible common equity is expected to rise to 17% in the second half of 2027 and further rise to 18% in 2028. The agency also believes that Wells Fargo's current stock price is still undervalued based on a 2027 valuation of 1.5 times the tangible book value of each share. Has this conversation been helpful so far?

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