Analyst: This Bank Stock is a "Top Pick"

Wells Fargo & Co (NYSE:WFC) was just named a "top pick" by Morgan Stanley, who said the bank, alongside the sector as a whole, will see tailwinds from quicker-than-expected interest rate hikes. The firm additionally upgraded Wells Fargo to "overweight" from "equal weight," with a price target of $61, noting that the emergence of the Covid-19 omicron variant should only push recovery back by about a quarter. 

Coming into today, sentiment on WFC was mostly positive, though there's still room for additional upgrades. Of the 12 in coverage, five still rated the stock a  tepid "hold." Shorts, meanwhile, are hitting the exits at an alarming rate, with short interest down 14.1% in the most recent reporting period.

Call trading has ramped up this morning, following the upgrade. In the first half hour of trading, 13,000 calls have crossed the tape, which is double the intraday average. However, the most popular contract is the December 45 put, followed up by the weekly 12/10 48- and 49-strike calls.

Last seen up 2.2% at $48.81 in response to the bull note, Wells Fargo stock is battling a short-term ceiling at the $49 level. Fresh off its third-straight weekly loss, WFC has shed 5.3% over the last month. Meanwhile, long-term support from the 150-day moving average has stepped up to keep this pullback in check, and the equity remains up 58.2% year-to-date.