16-29% Upside in This Large Bank: Wells Fargo Analyst

Wells Fargo boosted the financial sector to “overweight” from “market weight.” Matthew Burnell, senior analyst at Wells Fargo, cited superior earnings growth and lower event risk for the group.

“On a normalized basis, we expect EPS to grow about 20 to 25 percent for the group in 2011, which will be driven by loan growth that we expect will be positive for the first time in two years for the sector,” Burnell told CNBC.

In addition, Burnell said he sees two areas where valuations will increase.

“One is reduced headline risk for the sector and also more active capital deployment, which could add 2 to 3 percent to total returns,” he explained.

Burnell’s Bank Upgrade: Top Picks

Bank of America —"There’s 16 to 29 percent upside in this name from the close yesterday," noted Burnell.

PNC Financial


JPMorgan Chase

Goldman Sachs

Scorecard—What He Said:

  • Burnell's Previous Appearance on CNBC (Jul. 13, 2010)

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Burnell has investment banking clients who own shares of JPM, GS and PNC.

Burnell does not own shares of BAC or CMA.