Wells Fargo (WFC, $45.69) shares downgraded by Morgan Stanley
Wells Fargo shares got downgraded to equal weight from overweight by Morgan Stanley.
Morgan Stanley cited valuation concern and regulatory issues as factors behind the rating cut. It also lowered its share-price target to $46 from $49.
Wells Fargo shares have risen +58% year to date, thereby reflecting the biggest gain among large-capitalization bank stocks. Morgan Stanley analyst Betsy Graseck sees a more balanced risk-reward skew, with “less upside in the base and bull cases.”
Last week, Fed Chairman Jerome Powell said the asset cap placed on Wells Fargo three years ago owing to regulatory issues will remain until the firm has “comprehensively fixed its problems.”
Graseck noted, “We are interpreting these comments to mean Wells must materially reduce its number of consent orders outstanding to have the asset cap lifted.” Graseck indicated that that could potentially take a lot of time to do, as the consent orders are issued by different regulators, and each of the 10 consent orders has the possibility to be a multiyear process.
WFC sees its Stochastic Oscillator recovers from oversold territory
On December 24, 2024, the Stochastic Oscillator for WFC moved out of oversold territory and this could be a bullish sign for the stock. Traders may want to buy the stock or buy call options. Tickeron's A.I.dvisor looked at 56 instances where the indicator left the oversold zone. In of the 56 cases the stock moved higher in the following days. This puts the odds of a move higher at over .
Technical Analysis (Indicators)
Bullish Trend Analysis
WFC moved above its 50-day moving average on December 20, 2024 date and that indicates a change from a downward trend to an upward trend.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where WFC advanced for three days, in of 315 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 253 cases where WFC Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
Bearish Trend Analysis
The 10-day RSI Indicator for WFC moved out of overbought territory on December 02, 2024. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 39 similar instances where the indicator moved out of overbought territory. In of the 39 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Momentum Indicator moved below the 0 level on December 06, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on WFC as a result. In of 83 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for WFC turned negative on December 02, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 47 similar instances when the indicator turned negative. In of the 47 cases the stock turned lower in the days that followed. This puts the odds of success at .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where WFC declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 46, placing this stock slightly better than average.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. WFC’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.227) is normal, around the industry mean (0.958). P/E Ratio (11.928) is within average values for comparable stocks, (8.937). WFC's Projected Growth (PEG Ratio) (24.155) is very high in comparison to the industry average of (2.643). WFC has a moderately low Dividend Yield (0.023) as compared to the industry average of (0.054). P/S Ratio (2.595) is also within normal values, averaging (2.460).
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a major bank
Industry MajorBanks