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Pro Analysis

Buy Wells Fargo on the scandal weakness: Baird

Wells Fargo Bank
Rick Wilking | Reuters

Baird upgraded Wells Fargo shares to outperform from neutral, saying the recent sell-off on the company's phony account scandal is overdone.

Wells Fargo stock was down 11 percent this month through Friday. The company agreed with regulators to pay a $185 million fine due to unauthorized customer account openings.

"The stock has gone from loved to loathed in two to three weeks, and we believe the sell-off creates a good relative buying opportunity," analyst David George wrote in a note to clients Monday.

"We think pessimism in the stock is likely to peak over coming days, and find the market's extraction of ~$25B in WFC market value related to a $2.6M revenue loss to be excessive."