Mark Holder
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Wells Fargo: Which Analyst Is Right About Consumer Backlash?

Wells Fargo (WFC) was hit with a $185 million fine from CFPB over fraudulently signing up customers for financial products. In total, the bank signed up 2 million fraudulent accounts and fired over 5,300 employees due to the issue. 

Dick Bove of Rafferty Capital downgraded the stock on the news while Paul Miller of FBR Capital Markets remains bullish on the stock seeing the impact as minimal. Which analyst do you agree with?

The fine was a relatively small amount compared to the $245 billion valuation of the stock. The real question is whether this impacts the premium concept of the financial that has long benefited from strong product cross selling. 

My take is that Wells Fargo will face consumer backlash for the next year that will impact results. How could it not?

Disclosure: No position