UPDATE: Compass Point Downgrades Wells Fargo to Neutral Post Q3 Report
Compass Point reduced its rating on Wells Fargo (NYSE: WFC) from Buy to Neutral and lowered its price target from $41 to $37.
Compass Point said, "We are downgrading Wells Fargo (WFC) from Buy to Neutral and decreasing our price target to $37 from $41 following the 3Q12 earnings announcement. It has become apparent that the company will have a difficult time showing meaningful earnings growth in the next year due to: (1) interest rates at historic lows, (2) 13% of the loan portfolio in run-off and (3) expenses above a $12 billion quarterly run rate. Furthermore, the company's recent decision to keep conforming mortgages on the balance sheet, versus selling to the GSEs, illustrates the predicament WFC finds itself in."
Wells Fargo closed at $34.25 on Friday.
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Tags: Compass Point