Bove Dumps Wells Fargo (WFC)

Dick Bove of Rochdale Securities may have been responsible for today’s sell-off as many banking stocks fell late in the day.  Bove has downgraded Wells Fargo & Co. (NYSE: WFC) to a SELL rating after earnings today.  As far as how this compares, Bove already had a cautious HOLD rating on the stock.   The downgrade is based on the belief that what we saw on bottom-line results this morning is unsustainable.  This is after the firm had wider credit losses and Wells Fargo said the credit metrics would not improve until 2010.  As we noted this morning, Wells Fargo shares had risen roughly 25% since the June 30 close and had soared 200% since the March 9 close.

At some point the markets will finally demand real earnings improvements across the board in order to keep rewarding stocks.

JON C. OGG
OCTOBER 21, 2009