Wells Fargo’s Growth Prospects Brighten with Early Asset Cap Removal and Increased ROTCE Target

Analyst Betsy Graseck of Morgan Stanley maintained a Buy rating on Wells Fargo (WFC – Research Report), boosting the price target to $87.00.

Betsy Graseck has given her Buy rating due to a combination of factors, primarily the Federal Reserve’s decision to lift Wells Fargo’s asset growth restriction earlier than anticipated. This removal of the asset cap, which was initially expected to be lifted in the fourth quarter of 2025, is now occurring two quarters sooner, signaling a positive catalyst for the bank’s growth prospects.
With the asset cap lifted, Wells Fargo is poised to enter a multi-year period of expansion, aiming to reclaim lost market share in U.S. deposits and loans. The bank can now leverage its balance sheet and capital more effectively, particularly in capital markets, leading to faster loan and deposit growth. Additionally, the anticipated increase in Wells Fargo’s Return on Tangible Common Equity (ROTCE) target and the rise in price target from $77 to $87 reflect the expected benefits from these growth opportunities and reduced expense growth.

In another report released today, Barclays also maintained a Buy rating on the stock with a $87.00 price target.