Morgan Stanley upgrades Wells Fargo to Overweight with $102 price target

Morgan Stanley upgrade and $102 target

Morgan Stanley upgraded Wells Fargo from Equal-Weight to Overweight, naming the stock a top pick with a price target of $102, implying about 27% upside from Friday's close, according to analyst Manan Gosalia. The call was reported on October 5, 2026, with the firm arguing that normalizing balance-sheet growth should ease funding pressure and stabilize net interest margin.

Analyst rationale on margins

Gosalia said that "2026 has been a transition year, with Wells rebuilding its growth engine ahead of the full benefit to earnings and returns." He framed the upgrade as a shift in conviction rather than a routine tweak, pointing to "less margin dilution, more revenue from existing client relationships, and continued operating leverage" as the path to higher returns. The firm also flagged the stock as undervalued at roughly 1.5 times 2027 tangible book value per share.

Year-to-date performance gap

Wells Fargo shares are down about 14% year to date, lagging other major U.S. banks: JPMorgan Chase is up 3.2%, Bank of America is down 2.3%, Citigroup is up 10%, Morgan Stanley is up 7.2%, and Goldman Sachs is up 2.7% over the same period. Wells Fargo had been the worst-performing stock in Morgan Stanley's coverage this year, which makes the upgrade to a top pick a more pronounced reversal.

Market reaction and broader sell-side view

Wells Fargo shares rose more than 1% in the premarket following the upgrade. LSEG data cited by CNBC shows 18 of 26 analysts covering the stock assign a buy or strong buy rating, with an average price target implying about 24% upside. Recent Street calls cited in coverage include Goldman Sachs keeping a Buy rating, Truist raising its target to $95 earlier in the week, and JPMorgan trimming its target to $91.50 with a Neutral rating.

Q3 earnings on deck

The next verifiable milestone for Wells Fargo is its third-quarter earnings release, which the TIKR analysis flags as the test of Morgan Stanley's thesis on margin stabilization and loan growth. Investors will be watching for confirmation of management's July guidance that margin pressure from deposit and Markets growth eases and that the net interest margin stabilizes in the fourth quarter.