Wells Fargo (WFC) CEO Concerned Over Home Equity Losses

Wells Fargo (NYSE:WFC) Chief Executive Officer John Stumpf said on the top of his concerns is the effects unemployment may have on home-equity, which could result in huge losses.

Citing Stumpf, Sanford C. Bernstein & Co. said, “Stumpf noted that home-equity losses remain his number one concern, which makes sense to us given Wells has the largest portion of its loan book allocated to mortgages and home-equity loans among large banks.”

“Management was clear that it views the outlook for home-equity and mortgage losses to be more tied to employment conditions than home prices,” Bernstein analyst John McDonald wrote.

"Wells Fargo held $117.5 billion of home-equity loans at the end of December, with $42.8 billion of those made in California and Florida, according to the bank’s year-end filing. Almost $110.6 billion of the loans was held in a so-called core portfolio. The unemployment rate in the bank’s mortgage footprint is a percentage point higher than the national average of 8.9 percent," added McDonald.

He maintains an "Outperform" rating on the bank, which closed Thursday at $31.54, gaining $0.16, or 0.51 percent.

Pfizer (PFE) Reviewing All Divestiture Possibilities

Pfizer Inc.'s (NYSE:PFE) president of worldwide research and development, Mikael Dolsten, says the ongoing review of possible divestitures to strengthen the value of the company will be completed some time in 2011.

Dolsten said, "We are going through a comprehensive review that we aim to complete during this year."

Citing CEO Ian Read, Dolsten added that "we have an innovative core of our company with adjacent businesses, that each of them are doing really well.

"But we need also to understand what is the maximum value for those businesses, which of them actually have a higher value by being inside Pfizer and can benefit from the capabilities and our financial strengths, our reach in the market, and which would do better as businesses and create more value for shareholders to be outside the company."

This confirms the probability suggested by Sanford Bernstein analyst Tim Anderson said earlier this week that Pfizer may sell or spin off non-core businesses. Anderson believes they could trim the existing revenue base from $67 billion to a range of $35 billion to $40 billion.

Pfizer closed Thursday at $19.88, gaining $0.58, or 3.01 percent.

Nokia (NOK) Gets Ratings Boost from Bernstein

Sanford Bernstein analyst Pierre Ferragu upgraded the rating of Nokia (NYSE:NOK), saying there’s now more “meaningful upside risk that the company meets investors’ low expectations.”

Ferragu noted that not too many understood the implications over the short term of the deal Nokia made with Microsoft (NASDAQ:MSFT) to use its Windows Phone 7 platform in its smartphones.

“Given the risk of an acceleration of the decline of the company’s market shares and gross margins in the short term,” Ferragu said he remains "very cautious" on the outlook of the company.

Easing some of the pain will be the $1 billion Microsoft will pay Nokia in the deal, which, depending on how it's paid out, could shore up the mobile phone company during the transitional period.

Sanford Bernstein is looking for Nokia to generate EPS of 57 cents in 2011 and 59 cents for 2012.

They have a price target of $7.33 on Nokia’s ADRs. Nokia closed in New York at $8.51, gaining $0.17, or 2.04 percent.

The rating of Nokia was increased from "Underperform" to "Market Perform."