The outlook for Wells Fargo is improving, according to Morgan Stanley. Analyst Manan Gosalia upgraded Wells to overweight from equal weight and named the stock a top pick. His price target of $102 signals a gain of 27% from Friday’s close. Wells Fargo shares are down 14% year to date, lagging other major U.S. banks: JPMorgan Chase : up 3.2% in 2026 Bank of America : down 2.3% Citigroup : up 10% Morgan Stanley : up 7.2% Goldman Sachs : up 2.7% But Gosalia said “normalizing balance sheet growth should ease funding pressure, stabilize [net interest margin], and raises our conviction in the path to higher returns.” Net interest margin is a key profitability measure for banks that accounts for interest income relative to interest paid on deposits. WFC YTD mountain WFC in 2026 “Our view is that 2026 has been a transition year, with Wells rebuilding its growth engine ahead of the full benefit to earnings and returns. As the initial pace of expansion moderates, we expect the earnings profile to improve: less margin dilution, more revenue from existing client relationships, and continued operating leverage,” he said. The analyst added that the stock is undervalued at 1.5 times 2027 tangible book value per share, pointing to a big buying opportunity. Shares rose more than 1% in the premarket following the upgrade. Most analysts covering shares are bullish. LSEG data shows that 18 of 26 assigned a buy or strong buy rating to Wells Fargo. The average price target also points to upside of 24%.
