UPDATE: Goldman Sachs Downgrades Wells Fargo & Company to Neutral, Reiterates $40 PT

In a report published Friday, Goldman Sachs Group downgraded its rating on Wells Fargo & Company

from Buy to Neutral, and reiterated its $40.00 price target. Goldman Sachs noted, “We downgrade WFC from Buy to Neutral. At 1.7x tangible book value vs. peers of 1.2x, we believe that its best-in-class returns are largely reflected in its valuation. Since being added to the Buy list on September 10, 2012, WFC shares are up 0.5% vs. S&P up 2.1%. Over the past twelve months, WFC shares are up 22% vs. the S&P up 14%. While we still believe that WFC is positioned to grow EPS, we see less levers than several peers given 1) its already best-in-class funding costs, 2) less expense leverage and 3) the transition in mortgage banking from an earnings tailwind to a source of earnings support.” Wells Fargo & Company closed on Thursday at $34.76.