Below are the valuation targets for Wells Fargo (WFC) over the next 10 years.
Our valuation targets for Wells Fargo (WFC) in 2019 are:
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$482.97 (overvalued)
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$319.01 (fair value)
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$155.04 (undervalued)
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$102.00 (extreme undervalue)
The valuation targets for Wells Fargo (WFC) are based on a dividend growth rate of 10.00% which is derived from 1/3 the calculated 9-year average as indicated on the Value Line Investment Survey dated August 9, 2019 and applied to Edson Gould’s Altimeter. A graphical representation of the overvalued, fair value, and undervalued levels are below.
The above Altimeter translates into the following undervalued and overvalued ranges from 1972-2011:
10-Year Targets
Observations
According to Value Line Investment Survey, Wells Fargo (WFC) has an expected price range of $70-$95 by 2022-2024. On our end, we have a range from as low as $135.76 to as high as $249.69 in the same period of time.
Our work on Wells Fargo excludes a great deal of information. We could not included the overvalued/undervalued range from 2011 to the present because the levels are so high that it doesn’t allow a clear perspective on the range from 1972 to 2011. This is an exception to most stocks that we run 10-year price targets as it is usually in line with Value Line Investment Survey estimates.
The value WFC needs to reach to become “undervalued,” from the current price, is far above our normally conservative estimates. We are using the extreme undervalued level as our benchmark going forward with the expectation that WFC maintains a dividend growth rate of 10%. Any deviation below the 10% is a warning that the “extreme undervalued” level cannot be achieved as outlined above.
Last updated: August 21, 2019