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Wells: Reputational damage biggest hit to BofA

  • "We anticipate Bank of America (BAC -4.6%) will underperform its peers today," is the high-priced conclusion of the team at Wells Fargo after BofA is forced to suspend its capital return plans in the wake of an accounting miscalculation.
  • The actual net effect on the bank's capital will not be too material, says Wells, but reputational damage, upward pressure on expenses, and the idea of a more conservative capital return request next year could weigh on the stock over the next few months (for an example, see BB&T after the 2013 CCAR).
  • Wells currently has a Market Perform rating on the stock.
  • Previously: Black eye: BofA suspends buyback, dividend hike
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Comments (14)
  • StepUp
    , contributor
    Comments (471) | Send Message
    28 Apr, 11:09 AM Reply Like
  • 81george
    , contributor
    Comments (283) | Send Message
    I have been bullish on BoA since 2011 holding 200K shares. Will not sell. BoA is one of the best banking stocks any investor can own and the management has been doing a great job. The error is immaterial and will not affect their capital return plans to shareholders. Excellent opportunity to buy the current dip.
    28 Apr, 11:13 AM Reply Like
  • Hello Again 83
    , contributor
    Comments (466) | Send Message
    I am not selling either George. Some heads are going to have to roll at BAC but I am not invested in this stock for today but for 5 to 7 years down the road. Very disappointed. BAC has a great CEO in Moynihan but this was a blunder of biblical proportions. Take advantage of the cheaper stock price so you can get more shares.
    28 Apr, 11:20 AM Reply Like
  • Ruffdog
    , contributor
    Comments (1611) | Send Message
    Ya, go ahead and buy it!
    28 Apr, 03:48 PM Reply Like
  • Ruffdog
    , contributor
    Comments (1611) | Send Message
    Moynihan and the whole board should be fired! I voted my shares against all of them this morning.
    28 Apr, 03:50 PM Reply Like
    , contributor
    Comments (48) | Send Message
    Ruffdog...what vote this morning!
    28 Apr, 04:43 PM Reply Like
  • William Rudder
    , contributor
    Comments (343) | Send Message
    WFC needs to really look at the quality of this financial analysis. Not that they got it wrong, but somebody is being seriously overpaid...
    28 Apr, 11:20 AM Reply Like
  • agliata
    , contributor
    Comments (95) | Send Message
    I took this as a buy opportunity, executed at $15.25
    28 Apr, 11:31 AM Reply Like
    , contributor
    Comments (15) | Send Message
    I'm going to go down with the ship. long bac~
    28 Apr, 11:35 AM Reply Like
  • Esmail Behboodi
    , contributor
    Comment (1) | Send Message
    I am buying too
    28 Apr, 02:26 PM Reply Like
    , contributor
    Comments (2) | Send Message
    BAC has done quite well the last couple of years. Hope Mr. Moynihan resolves these issues quickly, and announces BAC plans moving forward. The CEO has done a wonderful job. I am long BAC.
    28 Apr, 02:29 PM Reply Like
    , contributor
    Comments (2) | Send Message
    I have been a investor all my life. Follow bank stocks closely after they hit all time lows. Bank stocks don't do well, nothing does well.
    28 Apr, 02:30 PM Reply Like
  • cbmetcalfe
    , contributor
    Comments (86) | Send Message
    Sold out this morning. Still long on the stock in general but it will go lower before it heads back up.
    28 Apr, 10:33 PM Reply Like
  • Ronald McDonald
    , contributor
    Comments (23) | Send Message
    Start by firing the CFO and work your way up- too big to manage
    29 Apr, 02:58 AM Reply Like
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