10 Undervalued Wide Moat Stocks to Buy According to Analysts

6) Wells Fargo & Company (NYSE:WFC)

Average Upside Potential: 17.52%

Forward P/E Ratio (As of September 25): 9.83x

Wells Fargo & Company (NYSE:WFC) is a financial services company, which offers diversified banking, investment, mortgage, and other related services in the US and internationally.

The global market experts believe that Wells Fargo & Company (NYSE:WFC) has a wide economic moat coming from its cost advantages and customer switching costs in the core banking operations. They opine that the company’s funding costs act as the key source of advantage. Additionally, Wells Fargo & Company (NYSE:WFC) has a vast and dense branch network. In Q2 2024, the company exhibited new credit card originations, which demonstrate higher credit quality than existing ones.

While Wells Fargo & Company (NYSE:WFC) continues to focus on margin expansion in wealth management and investment banking segments, the banking giant expects an increase in wealth management revenue in H2 2024. The market believes that the potential lifting of the asset cap imposed on the banking company should significantly enhance its earnings over the upcoming years.

The expected boost in earnings should be aided by increased revenues and improved operating efficiency.

Furthermore, Wells Fargo & Company (NYSE:WFC) might see ongoing advantages from the investments made in several sectors, including trading, investment banking, and credit card services. Market watchers believe that such areas should contribute to Wells Fargo & Company (NYSE:WFC)’s growth and profitability in the future. Apart from the strategic investments, the potential regulatory developments should help the growth trajectory of Wells Fargo & Company (NYSE:WFC).

Analysts at Deutsche Bank Aktiengesellschaft upped the shares of Wells Fargo & Company (NYSE:WFC) from a “Hold” rating to a “Buy” rating, giving the price target of $65.00 on 3^rd September. 83 hedge funds held stakes in the company as of Q2 2024.

ClearBridge Investments, an investment management company, released its fourth quarter 2023 investor letter. Here is what the fund said:

“Stock selection in the financials sector proved to be the largest contributor to relative outperformance. Banking stocks such as Wells Fargo & Company (NYSE:WFC) saw their share price rise during the quarter as investors anticipated Fed rate cuts that would reduce deposit costs while retaining economic strength and minimizing the risk of credit losses.”