UPDATE: BMO Capital Markets Initiates Wells Fargo at Market Perform; Challenges Ahead

BMO Capital Markets initiated coverage on Wells Fargo

with Market Perform rating and a $40.00 price target. BMO Capital Markets analyst Peter J. Winter commented, "Wells Fargo is one of the premier large bank franchises with a coast-to-coast branch network and 10.7% national deposit market share that is growing. We believe Wells Fargo will face some revenue challenges in both net interest income and fee income. Mortgage banking (14% of total revenues) is expected to decline, margin is expected to be under pressure and loan growth is forecasted to slow. The offset is lower expenses and lower provision expense but we wouldn't expect WFC's premium valuation to expand based on those drivers." Wells Fargo closed at $36.66 on Wednesday.