FBR Capital Markets Analyst Expects Wells Fargo (WFC) Slide to Continue - TheStreet

NEW YORK (TheStreet) -- Shares of Wells Fargo & Co. (WFC) - Get Report remain under pressure on Monday morning, as the aftereffects of the bank's phony account scandal set in. The company agreed on Sept. 8 to pay a $185 million dollar fine to regulators.

Two Wells Fargo employees have filed a class action suit in California against the bank. They allege wrongful termination and that company higher-ups created a culture in which low-level employees were driven to create the fake accounts in order to meet impossible quotas.

The seemingly-constant parade of bad news may mean dark days ahead for the stock.

"It's going to continue to have an impact on the stock price until the board makes some type of action here," FBR Capital Markets Analyst Paul Miller said Monday on CNBC's "Squawk on the Street." "It seems like the board is not is not making any action, which I think is going to cause continued pressure on the stock on the downside."

Wells Fargo CEO John Stumpf struggled while giving testimony to the Senate Banking Committee last Tuesday and is due back in Washington D.C. on Thursday to testify before the House Financial Services Committee.

"I don't think it's going to be that much better for them in front of the House as it was in the Senate last week," Miller said. "Hopefully Stumpf is better prepared going into this, but I just think this is going to get worse before it gets better, at this point."

(Wells Fargo is held in Jim Cramer's charitable trust Action Alerts PLUS. See all of Cramer's holdings with a free trial.)

Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:

We rate WELLS FARGO & CO as a Buy with a ratings score of B. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and attractive valuation levels. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

You can view the full analysis from the report here: WFC

(Wells Fargo is held in Jim Cramer's charitable trust Action Alerts PLUS. See all of Cramer's holdings with a free trial.)

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