UPDATE: Sterne Agee Downgrades Wells Fargo & Co. to Neutral, Reiterates $42 PT on Slowing Momentum

In a report published Friday, Sterne Agee analyst Todd L. Hagerman downgraded the rating on Wells Fargo & Co. WFC from Buy to Neutral, but reiterated the $42.00 price target. In the report, Sterne Agee noted, “Although WFC's outlook remains constructive, particularly expense leverage tied to the company's efficiency initiative and legacy servicing/mortgage-related costs, earnings growth is clearly moderating into '14. The slowing momentum is only exacerbated by the stubbornly low rate environment and normalizing mortgage banking revenues. With the shares trading at 10.2x '14 EPS, our sense is that meaningful multiple expansion from current levels is unlikely.” Wells Fargo & Co. closed on Thursday at $40.94.