Shares of Wells Fargo & Co. (WFC) dropped 2.4% in premarket trading Thursday, extending recent losses that have taken them to 11-year lows. J.P. Morgan analyst Vivek Juneja reiterated the underweight rating he's had on the stock for the past two years, writing in a note to clients that "concerns about dividend cuts have weighed on Wells Fargo recently because it has the highest payout ratio among our banks and also because of remarks by [Federal Reserve] Vice Chair [Randal] Quarles." Wells Fargo's stock lost ground in nine of the past 10 sessions, losing 24.9% over that stretch, to close Wednesday ($22.53) at the lowest price since June 22, 2009. At that price, Wells Fargo's dividend yield is 9.05%, compared with the yield for the SPDR Financial Select Sector ETF (XLF) of 2.90% and the implied yield for the S&P 500 of 2.04%, according to FactSet. Regarding speculation by some of a merger between Wells Fargo and Goldman Sachs Group Inc. (GS), Juneja said any bank acquisition by Wells is "banned by law" as the bank already exceeds the 10% deposit market share limit. Wells' stock has tumbled 58.1% year to date through Wednesday, while the financial ETF has shed 32.9%, Goldman's stock has declined 25.3% and the S&P 500 has lost 12.7%.
-Tomi Kilgore; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
May 14, 2020 08:01 ET (12:01 GMT)
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