Morgan Stanley Upgrades Wells Fargo to Overweight and Names It a Top Pick, $102 Target

Morgan Stanley upgraded WFC to Overweight from Equal-weight on October 5 and named it a top pick, with a $102 price target. With Wells Fargo shares at $80.45, the target implies about 27% upside. The stock is down 14% this year, against a 7% gain for the median bank in Morgan Stanley's coverage.

The case rests on an "improving balance between growth and profitability" after the removal of the Federal Reserve's asset cap, with 2026 cast as a transition year. Morgan Stanley models net interest margin at 2.42% through the first quarter of 2027, rising to 2.49% by the fourth quarter of 2027, and return on tangible common equity climbing to 17% in the second half of 2027 and 18% in 2028, from 13% now. It values the stock at 1.5 times 2027 tangible book and argues that "normalizing balance sheet growth should ease funding pressure."

The new target sits slightly above the Street: across 23 analysts the average target is $100.20, in a range of $90 to $115, with 17 Buy and 9 Hold ratings (SentiSense analyst consensus). Wells Fargo reports third-quarter results before the open on Tuesday, October 13, with consensus EPS of $1.85. What to watch: whether the bank's guidance on net interest income and expenses supports the margin path Morgan Stanley laid out, and loan growth now that the balance sheet is free to expand.