Morgan Stanley Upgrades Wells Fargo to Overweight Top Pick

Morgan Stanley upgraded Wells Fargo from equal weight to overweight, designating the stock as a top pick with a price target of $102. Analyst Manan Gosalia noted that the stock is undervalued at 1.5 times its 2027 tangible book value per share, which suggests a potential 27% gain from the previous Friday's close.

Wells Fargo shares have declined 14% year to date, trailing competitors including Citigroup and JPMorgan Chase. Gosalia characterized 2026 as a transition year in which the bank is rebuilding its growth engine. He expects that normalizing balance sheet growth will stabilize net interest margins and reduce funding pressure, eventually leading to higher returns and improved earnings.

Shares of Wells Fargo rose more than 1% in premarket trading following the announcement.