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Wells Fargo stock drops on analyst downgrades after earnings
© Reuters.
By Senad Karaahmetovic
Shares of Wells Fargo (NYSE:WFC) are moving lower in pre-market Tuesday after analysts slashed their rating on the banking giant following “tough” Q422 results.
Wells Fargo shares closed nearly 3.3% higher on Friday despite the bank reporting that its Q4 expenses soared to over $16 billion. Moreover, analysts were disappointed with the net interest income (NII) figures.
As a result, Jefferies analysts downgraded the stock to Hold from Buy with a price target of $46 per share (down from the prior $49).
“We see risk-reward as more even from here, with positive developments on the regulatory and operating cost front offset by lower core earnings power,” they said in a client note.
Similarly, the WFC stock was cut at Piper Sandler, alongside Bank of America (NYSE:BAC).
“Lowering rating to Neutral as turning NII overwhelms a good cost story and re-emergent capital management,” analysts said in a downgrade note.
On Bank of America, the analysts added:
“An excellent company, but lowering our rating from Neutral to UW given uncertainty in the outlook. BAC posted a mixed 4Q with better-than-expected noninterest income and NIM; but loan growth, expenses, and credit costs all missed our expectations.”
Shares of Wells Fargo and Bank of America are down 1.3% and 0.8%, respectively.
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