Wells Fargo stock drops on analyst downgrades after earnings

Wells Fargo stock drops on analyst downgrades after earnings
© Reuters. Wells Fargo (WFC) stock drops on two analyst downgrades after earnings

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.

Source: investing.com