But with that surge, Wells Fargo no longer is trading at a steep discount to peers as it was a year ago. Shares now trade at 13.9 times 2022 estimated earnings, putting it within spitting distance of Bank of America (BAC) and JPMorgan Chase (JPM), which trade at 14.5 times and 14.1 times, respectively. Citigroup (C), which like Wells Fargo was viewed as a self-help story, trades at 9.9 times projected 2022 earnings, by UBS’ measure.

Wells Fargo had been somewhat of a cautious favorite among analysts over the last year. While all banks were hit by the same set of pandemic problems—low interest rates and potential loan losses—Wells Fargo also had its own problems to fix dating back to its fake-accounts scandal from five years ago. For bank investors, that meant more room for potential upside. With a new—and determined—management team in place, Wall Street has been confident that the bank is on the right path to get out from under the $2 trillion asset cap levied by the Federal Reserve in response to the scandal, and take other measures to improve operations.

While Wells Fargo is on track, UBS thinks that the stock mostly reflects the recovery at current trading levels. UBS also worries that the asset cap could persist into 2022, limiting the bank’s ability to grow its loan book and see an increase in net interest income.

“We continue to believe that ample room exists for cost reductions and capital optimization,” wrote UBS analyst Saul Martinez. “However, revenue growth depends on loan growth and higher interest rates. While expecting the asset cap to eventually be lifted, the risk that it persists beyond 2022 could be underappreciated.”

Wells Fargo stock is down 2.1% in midday trading Wednesday, slightly lagging the KBW Bank index, which is down 1.8%.

Write to Carleton English at carleton.english@dowjones.com