Wells Fargo Upgraded to Neutral as Baird Sees Balanced Risk After Selloff

2026-02-14 companies

New York, Saturday, 14 February 2026.
Baird upgraded Wells Fargo to Neutral, noting the recent selloff normalized valuations to 11x expected 2026 earnings, creating a balanced risk scenario with an $85 target.

Shift in Market Sentiment

Investment firm Robert W. Baird has revised its outlook on Wells Fargo & Company (NYSE: WFC), upgrading the banking giant from an “Underperform” rating to “Neutral” on Friday, February 13, 2026 [1][5][7]. The strategic pivot comes as analysts reassess the lender’s risk profile following a notable decline in share value since the beginning of the year [1]. While the firm stopped short of recommending a purchase, the upgrade signals that the recent market selloff has sufficiently normalized the stock’s valuation to balance the risk-reward equation for investors [1][4].

Valuation and Earnings Analysis

A key driver behind this reassessment is the bank’s current trading multiple. Baird analysts highlighted that Wells Fargo is now trading at approximately 11 times its expected earnings for 2026 [1]. This adjustment brings the bank’s valuation closer to what the firm considers fair levels, although they noted that the price point is not yet attractive enough to actively draw in new capital [1]. The firm maintained a price target of $85.00, which is grounded in a valuation of roughly 1.8 times the bank’s next-12-month tangible book value [1][5]. This target sits slightly below historical levels, a calibration Baird attributes to a tougher operating backdrop [1].

Regulatory Catalysts and Future Growth

Looking beyond the immediate valuation metrics, Baird expressed optimism regarding Wells Fargo’s trajectory once long-standing regulatory asset caps are eventually lifted [1]. The firm identified several potential growth avenues in a post-cap environment, specifically pointing to stronger loan growth, increased capital markets activity, and a reduction in compliance costs [1]. These factors are expected to bolster profit growth and operating efficiency, keeping the bank on a path toward higher returns [1]. However, analysts cautioned that expectations for this growth remain somewhat elevated, noting that much of the anticipated improvement is contingent upon the bank adding leverage [1].

Market Performance and Analyst Consensus

The upgrade arrives amidst a broader context of fluctuating bank shares. As of February 13, 2026, Wells Fargo stock was trading at $86.94, hovering slightly above Baird’s $85.00 target [7]. This suggests a potential downside of approximately -2.231% based on the firm’s objective. While Baird has moved to the sidelines, other market observers maintain varied perspectives; for instance, JPMorgan Chase & Co. recently raised its target to $99.50 while maintaining a neutral stance [5]. As one of the leading American banking groups, Wells Fargo continues to manage a massive portfolio, overseeing $1.37 trillion in deposits as of the end of 2024 [6].

Sources

Analyst Ratings Wells Fargo