FBR Capital Markets lowered its rating for Wells Fargo to market perform from outperform, citing increased government scrutiny and weaker financial results from the bank’s recent scandal.
The company agreed with regulators in September to pay a $185 million fine due to unauthorized customer account openings.
“We believe the stock will remain range-bound until we are able to get more clarity into ongoing regulatory investigations, the recently announced independent audit, and the steps still needed to be taken in order to put the sales practice issue in the rear-view mirror,” analyst Paul Miller wrote in a note to clients Wednesday.
“While the future impact is uncertain right now, we believe that scrutiny over sales practices will weigh on revenue growth and result in higher expenses. ”
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