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 in upward trend: price rose above 50-day moving average on May 17, 2023
WFC moved above its 50-day moving average on May 17, 2023 date and that indicates a change from a downward trend to an upward trend. In of 37 similar past instances, the stock price increased further within the following month. The odds of a continued upward trend are .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on June 02, 2023. You may want to consider a long position or call options on WFC as a result. In of 87 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for WFC just turned positive on May 17, 2023. Looking at past instances where WFC's MACD turned positive, the stock continued to rise in of 47 cases over the following month. The odds of a continued upward trend are .
The 10-day moving average for WFC crossed bullishly above the 50-day moving average on May 19, 2023. This indicates that the trend has shifted higher and could be considered a buy signal. In of 15 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where WFC advanced for three days, in of 301 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 237 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 Stochastic Oscillator may be shifting from an upward trend to a downward trend. In of 63 cases where WFC's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are .
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 .
WFC broke above its upper Bollinger Band on May 17, 2023. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Fundamental Analysis (Ratings)
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 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 Valuation Rating of (best 1 - 100 worst) indicates that the company is fair valued 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 (0.957) is normal, around the industry mean (0.939). P/E Ratio (11.919) is within average values for comparable stocks, (17.536). Projected Growth (PEG Ratio) (0.825) is also within normal values, averaging (3.223). WFC has a moderately low Dividend Yield (0.029) as compared to the industry average of (0.056). P/S Ratio (2.054) is also within normal values, averaging (2.344).
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. WFC’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 81, placing this stock worse than average.
Notable companies
Industry description
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Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
General Information
a major bank
Industry MajorBanks
WFC and
Correlation & Price change
A.I.dvisor indicates that over the last year, WFC has been closely correlated with BAC. These tickers have moved in lockstep 85% of the time. This A.I.-generated data suggests there is a high statistical probability that if WFC jumps, then BAC could also see price increases.
