Wells Fargo (WFC) Stock Falls, Macquarie: Negative Headlines Make it 'Challenging' to Predict Floor - TheStreet

NEW YORK (TheStreet) -- Shares of Wells Fargo (WFC) - Get Report were retreating in early-afternoon trading on Thursday as Macquarie analysts said it's difficult to determine a floor in the stock, given the consistently negative headlines, but it could go as low as $42 at some point. 

Wells Fargo was trading at $44.50 per share midday on Thursday. 

The San Francisco-based bank enjoyed a better valuation compared to peers before the account openings issue developed, Macquarie said. 

"Although we find the stock more intriguing given the recent underperformance, we do not yet find the valuation compelling at a 5% premium to peers," the firm said in an analyst note, according to Barron's.

The magnitude and time frame of Wells Fargo's underperformance compares "less severely" than similar situations faced by JPMorgan Chase (JPM) and Goldman Sachs (GS). 

Macquarie added that the recent clawbacks issued by Wells Fargo were a "positive response" as it continues to face regulatory scrutiny.

Wells Fargo has come under fire from regulators after the Consumer Financial Protection Bureau fined the company $185 million for opening 2 million customer accounts illegally. 

CEO John Stumpf is testifying before the House Financial Services Committee today and appeared before the Senate Finance Committee last week. 

Earlier this week, the company's board said Stumpf would forfeit $41 million in unvested stock awards, as well as any bonus for the year. Stumpf won't receive a salary while the company conducts an internal investigation into its sales practices. 

(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:

TheStreet Ratings team rates Wells Fargo as a Buy with a ratings score of B.

The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and attractive valuation levels. The team feels its strengths outweigh the fact that the company shows weak operating cash flow.

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

Image placeholder title

WFC

data by

YCharts