Wells Fargo shares have experienced a nearly 16% decline in 2026, raising investor concerns about the bank's exposure to the pressured private credit and leveraged loan markets. However, Bank of America analyst Ebrahim Poonawala believes that the current valuation reflects excessive skepticism about the bank's execution capabilities.
He maintains a buy rating on Wells Fargo with a price target of $95, suggesting a potential 20% upside from the stock's recent closing price. Poonawala argues that the bank's goal of achieving an 18% return on tangible common equity by 2028 is more attainable than market sentiment suggests.
Currently, Wells Fargo trades at a price-to-earnings ratio of 10.1 based on 2027 estimates and a price-to-tangible book value of 1.7, significantly lower than its December peak of 2.2. He notes that recent credit concerns are more idiosyncratic than systemic, indicating that a few strong quarters could restore investor confidence without justifying a long-term valuation discount.
This perspective aligns with the broader market consensus, as 18 out of 25 analysts covering Wells Fargo recommend buying the stock