Wells Fargo won over a longtime critic Wednesday when well known banking analyst Dick Bove upgraded the bank to a “buy” from a “hold.”
“Despite its recent bad times, the bank remains a formidable presence,” Bove, with Odeon Capital Group, told clients in a note Wednesday. “This company has $572.2 billion in funding that has a zero cost on its income statement. You need to reread that sentence again to understand the enormity of the earnings power created by this position.”
I spoke with Bove Wednesday to learn more about what spurred his change of heart on Wells Fargo and the timing of the upgrade.
Bove, who is based in Florida, said it started when he took a closer look at just how hot the nation’s housing market is these days. After confirming that his assessment of housing extended well beyond the Sunshine State, Bove said he looked for the right opportunity in his universe to profit.
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