Wedbush upgrades Wells Fargo to outperform, raises price target to $55

Wells Fargo’s shares jumped after Wedbush Securities upgraded the bank to “outperform” on Monday, just over a week before the company reports earnings on Tuesday. The analyst lifted the rating from “neutral” and raised the price target to $55 from $48, citing stronger loan growth and a tighter cost base.

The upgrade comes as the bank tries to shed a decade of scandals that hurt its reputation and stock price. Since 2020, Wells Fargo has cut expenses by more than $10 billion, sold non‑core assets, and improved its credit quality. Recent quarterly results showed net interest income rising 7 percent and non‑interest income beating expectations. Analysts see the bank’s balance sheet now more resilient than during the 2023 banking‑sector shake‑up that saw peers like Credit Suisse and Silicon Valley Bank fail.

Investors are also reacting to a clearer earnings outlook. Wall Street expects the bank to post earnings per share of about $0.86, up from the $0.78 consensus a month ago. Revenue forecasts have been nudged higher, driven by higher mortgage‑backed‑securities holdings and a rebound in consumer deposits. The upgrade reflects confidence that the bank can deliver on these numbers, despite lingering concerns about legacy litigation and the broader economy’s slowdown.

All eyes will be on the earnings call next Tuesday. If Wells Fargo meets or exceeds the revised expectations, the stock could continue its climb and pull other lagging banks higher. A miss, however, could reignite doubts about the turnaround and prompt analysts to reconsider the upgrade. The market will also watch for commentary on the bank’s strategy for digital banking and its progress in resolving regulatory issues, which could shape its performance for the rest of the year.