Bank of America backs Wells Fargo shares as valuation discount widens

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BofA backs Wells Fargo on valuation

Highlights

Bank of America analyst Ebrahim Poonawala reiterates a buy rating on Wells Fargo, sets a $95 price target, projecting 20% upside from Tuesday's close.
Wells Fargo shares have declined nearly 16% in 2026, now trading at 10.1 times 2027 P/E and 1.7 times price to tangible book value, compared to 2.2 times in December.
Bank of America views recent credit concerns as idiosyncratic, not systemic, with 18 of 25 LSEG-tracked analysts rating Wells Fargo a buy or strong buy.

Analyst call highlights valuation gap

As reported by CNBC, Bank of America analyst Ebrahim Poonawala reiterates a buy rating on Wells Fargo with a $95 price target, implying about 20% upside from Tuesday's close.

In a note to clients on Wednesday, Poonawala says the bank's current valuation likely reflects growing skepticism about execution. He argues the route to an 18% return on tangible common equity, potentially by 2028, is more achievable than market sentiment suggests, while the recent de-rating appears out of proportion with underlying fundamentals.

Wells Fargo shares have fallen nearly 16% in 2026. Poonawala says the stock is trading at 10.1 times price-to-earnings based on 2027 estimates and at 1.7 times price to tangible book value, below the 2.2 times level reached in December when the market more fully priced in management's 17% to 18% ROTCE target.

Credit concerns and broader market view

Investors are weighing Wells Fargo's exposure to private credit and leveraged loan markets, both of which are under pressure this year. Bank of America says recent concerns tied to a small number of larger exposures appear idiosyncratic rather than systemic, though a few cleaner quarters may be needed to restore confidence.

The firm's view broadly aligns with Wall Street consensus. LSEG data shows 18 of the 25 analysts covering Wells Fargo rate the stock buy or strong buy, reinforcing the case that the current discount may not reflect a lasting structural problem.

Our earlier roundup of major Wall Street analyst calls highlighted a wave of rating initiations, upgrades and downgrades across technology, consumer and industrial names. It showed analysts staying upbeat on selective AI- and growth-linked stocks while turning more cautious on companies facing competitive pressures, valuation concerns or demand headwinds—context that helps frame how today’s Wells Fargo note fits into broader market positioning.

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