After Wells Fargo announced a strategic realignment of its mortgage banking business that includes exiting the correspondent mortgage banking channel and reducing the size of the bank’s mortgage servicing portfolio, Morgan Stanley analyst Betsy Graseck said the shift "doesn’t move the EPS needle," estimating that the exit from the correspondent channel will result in a de minimis impact to 2023 EPS of 0c-1c, or 0.05%-0.55%. Graseck, who expect Wells to redirect capital associated with correspondent mortgage banking to retail mortgage production, has an Overweight rating and $58 price target on Wells Fargo shares.
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