Will Wells Fargo stock hit $66? One Wall Street analyst thinks so.

As first-quarter bank financial reports come out, more and more big banks are facing pressure from rising interest rates, as they have to gradually raise deposit rates to stay competitive.

In light of these challenges.Wells Fargo Bank (NYSE: WFC)For the full year, net interest income is expected to fall 7% to 9%, but one analyst believes there is room for Wells Fargo's business performance to rise despite the decline in the company's share price as shown in its first-quarter results.

On Monday, Argus Research raised its price target on the stock from $57 to $66, maintaining a Buy rating. This implies an upside of 18% over the next 12 months.

Wells Fargo Has More Room to Rise

The analyst pointed out that Wells Fargo's first-quarter earnings exceeded expectations. Wells Fargo reported first-quarter revenue of $20.9 billion, up 0.6% from a year earlier, well above the $18.6 billion expected. Earnings per share fell to $1.20 from $1.23, but were still well above the $1 expected.

Argus notes the expected decline in net interest income this year, but says it is bullish on the stock as strong fee income is expected to offset the decline in net interest income, which is projected to fall 2%.

Can Wells Fargo Sustain Growth?

The biggest driver of Wells Fargo's recent performance hasn't been its internal performance, but the end of the consent decree that was levied against the company in February after its 2016 false account scandal. Wells Fargo shares soared on the news, and could continue to climb if it continues to regain the government's favor, which it seems to be heading toward.

The business environment looks less certain. It is not yet clear whether the Fed will lower interest rates as much as it has predicted. Even so, the economy still looks strong enough to avoid a recession, which is a bigger concern for commercial banks. If the economy stabilizes, Wells Fargo's 18% gain is within reach, especially as it tinkers with its reputation in front of the regulator.

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Wells Fargo is an advertising name partner of The Ascent, a Motley Fool company.Jeremy Bowman has a position in Wells Fargo.The Motley Fool does not hold any of the above shares.The Motley Fool has a disclosure policy.

Will Wells Fargo Stock Go to $66? A Wall Street Analyst Thinks So was originally published by The Motley Fool.