Morgan Stanley ups Wells target to $50 after CEO hiring, but stays on sidelines
Morgan Stanley analyst Betsy Graseck said the hiring of Charlie Scharf to become CEO at Wells Fargo is a positive that lifts "a big uncertainty" and she raised her price target on the bank's shares to $50 from $47 following the news. However, she remains on the sidelines until there is more clarity on when the Fed imposed asset cap and consent order can be lifted, estimating that it has added about $2B to the bank's expense base. She also wonders if Scharf will pursue further business rationalization, which could reset earnings expectations going forward. Graseck keeps an Equal Weight rating on Wells Fargo shares, though she sees a path to a potential $56 stock price over the longer-term once the consent order gets lifted.