Analysts with financial services firm Stifel Nicolaus said Monday that they are downgrading shares of Wells Fargo to "hold" as the Federal Reserve's moves to hold down interest rates will start to catch up with the bank.
Monday, September 17, 2012
It ends a long run for the bank, considered one of the strongest U.S. banks in terms of stock performance, as a "buy" for the firm. I wasn't able to determine when Stifel made it a buy, but it's been there since I came to the Observer last year.
Stifel said that while mortgage refinancing will keep the bank strong for the next few quarters, it will likely taper off. At that point, the shrinking net interest margin will affect Wells' earnings more.
Wells shares closed Monday at $35.33, down 2 percent, though it has gained more than 4 percent in the past two weeks as bank stocks have rallied. Stifel said it would recommend buying Wells again in the $32 to $33 range.
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