Wells Fargo & Co. (NYSE:WFC) shares are extending Friday’s declines in Monday pre-market trading, as analyst downgrades pile on after the bank lowered its net interest income forecast.
Firms cutting their rating on Wells Fargo stock to neutral include Goldman, BofA and Buckingham. Shares of Wells Fargo fell about 1.6% Monday, after closing down 2.6% Friday, at the lowest since 31 December 2018.
Wells Fargo likely to remain ‘dead money’ and lag peers until there’s greater clarity around revenue inflecting.
The bank’s weak NII outlook is a clear outlier Vs peers and seemingly reflects further runoff of higher yielding assets and poor balance sheet positioning.
Which likely pushes out its revenue recovery story to 2-H of Y 2020 earliest. That’s even as expense cuts are on target and there are signs of improvement around loan/deposit growth and other customer activity levels.
Wells Fargo’s revenue base keeps eroding on a lack of upside catalysts until a new real CEO is announced.
Last Friday, as Well Fargo tanked, JPMorgan Chase & Co.’s Q-1 results beat and it maintained its outlook for net interest income , aka NII.
HeffX-LTN’s overall outlook for WFC is Neutral to Bearish as Key technical indicators turn Very Bearish in here.