Wells Fargo & Co. (WFC) is expected to see some upside once interest rates rebound, and it currently is taking all the right measures and it trades inexpensively similar to most large-cap money center banks, says Moshe Orenbuch, Managing Director at Credit Suisse Group.
“As a bank analyst, you should want to see a bank with large market shares, high levels of core deposits and low funding costs, but in this environment, that kind of works against you, because the lower they are, it’s hard to take them down as your asset yields come down, and that has somewhat hurt Wells Fargo. I think they will turn around when interest rates do start to rise again. I think it’s tough, because I think the company is doing the right things, but it’s hard for the stock to perform in this environment,” Orenbuch said.
FOR MORE INFORMATION ABOUT THIS INTERVIEW CLICK HERE.
Low interest rates have depressed the regional banking component of large banks, but the volatility in the capital markets may turn in 2013, and the future may hold a better environment for banks, Orenbuch says.
“Our overall sentiment has been that the regional banking component, if you will, of the earnings is still under pressure because of ongoing low interest rates and fixed rate assets that are rolling off, and that has had some negative implications. Capital markets have been volatile, but we are expecting that the early part of 2013 should be better than a year ago, so that’s been a bit of a bright spot,” Orenbuch said.
Wells Fargo & Company (WFC) Sees Revenue Growth and Expected Rising Stock Prices
February 06, 2013
Wells Fargo & Co (WFC) Expected to Increase Dividend as Revenue Grows
December 09, 2013
Wells Fargo & Co (WFC) Well-Positioned for Interest Rate Hike
December 14, 2015
Wells Fargo & Co (WFC)’s Warrants to Lower in Price if Dividend Goes Above Approximately $1.36
April 10, 2013
Wells Fargo & Co. (WFC) Trades Inexpensively Relative to Management Quality and Macroeconomic Outlook
April 22, 2013
