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A customer exits a Wells Fargo & Co. bank branch in Los Angeles Patrick T. Fallon/Bloomberg via Getty Images
Citi Research upgraded Wells Fargo shares to a buy rating from neutral on Friday, saying the bank has a “clear path to improving returns” with a reasonable valuation.
“We see them returning to positive revenue growth in mid-2019, which can serve as a catalyst to the stock as can help drive home the story that the issues are moving to rear view mirror,” Citi’s Keith Horowitz said in a note.
Citi believes this is a good time for investors to buy in to Wells Fargo.
“We think [Wells Fargo] should fare well on the credit side; particularly as the lack of balance sheet growth will be a positive attribute when ‘late cycle’ concerns weigh on other names,” Horowitz said.
Shares of Wells Fargo rose 1 percent in premarket trading from Thursday’s close of $53.56. Citi has a $60 price target on Wells Fargo stock.