Morgan Stanley Upgrades Wells Fargo to Buy, Sets $102 Target Ahead of Q3 Earnings

Morgan Stanley upgraded Wells Fargo (WFC) to buy from hold on Monday, naming it a top pick with a $102 price target implying roughly 27% upside from Friday's close. The call came ahead of the bank's third-quarter earnings report, scheduled for October 13, 2026. Wells Fargo rose about 1.5% Monday but remains down roughly 12% this year, trailing peers including BNY Mellon (+24%), Citigroup (+11%) and Goldman Sachs (+2%). Morgan Stanley said pressures driving the underperformance are easing, chiefly net interest margin compression tied to balance-sheet expansion following the June 2025 removal of a $1.95 trillion Federal Reserve asset cap. Wells Fargo held $2.23 trillion in assets as of June, up 15% year over year. CFO Mike Santomassimo said at a September 15 conference that third-quarter net interest margin was running ahead of expectations. Morgan Stanley also cited investment banking, where fees have more than doubled since 2022. It projects return on tangible common equity rising to 17% in the second half of 2027 and 18% by 2028.