NEW YORK ( TheStreet) -- Shares of Wells Fargo ( WFC) closed down 1.5% to $42.07 on Wednesday following the bank's downgrade by analyst Scott Siefers of Sandler O'Neil. Seifers, who now has a hold rating on the stock, cited Wells Fargo's valuation as being higher when compared to its peers.However, from my vantage point I believe Wells Fargo's price-to-earnings ratio, which is two points higher than JPMorgan Chase ( JPM), is deserved. But this is not the first time Wells Fargo has created doubt among analysts. There were plenty of questions when the bank reported fiscal first-quarter earnings results in April. The Street wasn't pleased with management's inability to grow the bank's usually strong mortgage lending business. The stock dropped 5% in the days that followed. I didn't disagree that a 13% sequential drop in loan originations was disturbing. But I also didn't think it was time to panic either. Given Wells Fargo's excellent track record of execution and solid leverage, I was already looking forward to the second quarter. I said: "With better improvement, these shares should reach $45 sometime in the second half of the year." Since that article, the stock has been up by as much as 15%. Wells Fargo will report second-quarter earnings on Friday. With shares now trading at less than 10% away from my year-end target of $45, I don't see a reason to change course, especially given the bank's much improved growth prospects on the likelihood of higher interest rates. BAC) and Citigroup ( C) yielded similar lackluster outcomes. For Wells Fargo, however, given the 2% year-over-year decline in expenses, it was clear that management placed an emphasis on cost cutting. I've said it before: Investors shouldn't discount the level of difficulty there is in reducing expenses amid a highly competitive banking market. I believe Siefers is overlooking this fact. In that regard, I don't believe Wells Fargo's second-quarter results will disappoint on Friday. Analysts are looking for earnings of 93 cents per share on revenue of $21.2 billion, which represents 12% year-over-year earnings growth and a slight decline (40 basis points) in revenue. I think Wells will surprise the Street with a beat on revenue.