In the lead-up to Q1 earnings for the big banks, Wells Fargo has trimmed its price target for U.S. Bancorp (USB) from $62 down to $56, although it maintains an Overweight rating on the shares. The update comes as part of a broader perspective on the sector, where the firm expresses optimism over a one-year span due to what they describe as the “largest deregulation in three decades.” However, they caution that Q1 projections could be challenging, largely because of uncertainties surrounding policy decisions.
Wells Fargo has adjusted its estimates downwards by 4% for the first quarter and by 2% for the span through 2027. This conservative shift primarily stems from what they perceive as a “degree of paralysis” tied to policy-related unpredictability. As a result, Wells is taking a more cautious stance regarding investment banking, loan issuance, the repricing of fixed assets, and reserve management, according to insights shared with investors in a research note. Despite these adjustments, Citi (C) and JPMorgan (JPM) continue to be the firm’s top choices.
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