Two Wall Street analysts affirmed their ratings and price targets.
“Regulators are privately signaling they’re still not satisfied with the bank’s progress in compensating victims and shoring up controls,” Bloomberg reports, citing knowledgeable sources.
“The Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau have warned the firm they may bring new sanctions over the company’s pace in fulfilling those obligations, [the sources said].”
The Wells Fargo scandals began in 2016.
Perhaps the biggest one involved Wells Fargo staffers opening accounts for customers without their consent. The staffers were trying to meet aggressive sales goals set by their bosses. Some customers saw their credit scores lowered as a result of the activity.
Wells Fargo recently traded at $43.84, down 4.1%. It has still gained 22% over the past six months.
As for the analysts, Morgan Stanley’s Betsy Graseck has an overweight rating and a $49 price target for the bank.
“While the [Bloomberg] article provides more color than was previously made public, Wells had already been warning investors in its regulatory filings that the company hadn’t satisfied certain aspects of the CFPB and OCC consent order and that additional penalties could be imposed.”
Piper Sandler’s R. Scott Siefers sounded more pessimistic than Graseck. He has a neutral rating and a $45 price target.
“The bottom line in our view is that today’s news represents an unfortunate turn to a part of the WFC story the market had hoped was proceeding on a forward path,” Siefers wrote.
“Management (particularly the new CEO) has been very candid that there could be setbacks along the way. Nonetheless, we believe the market had hoped that any incremental news would be good, rather than akin to what we learned today.”