Summary
- Warren Buffett appears to have made a similar mistake dumping Wells Fargo as the airlines earlier this year.
- Wells Fargo still trades below TBV and far below peer valuations now.
- The company has a path to replicating the 2019 EPS of $4+ with upside from eliminating $10 billion in costs.
- The stock is cheap at $28 based on $4+ EPS potential.
As Wells Fargo finally breaks out from the virus lows, the stock has plenty more upside. The Warren Buffett exit likely helped create an artificial low in the stock similar to the airlines earlier this year. My investment thesis remains bullish on the bank stock returning to pre-virus highs and beyond.
