Sloan’s exit “is a positive step” for Wells Fargo, analysts at Raymond James said on Friday, upgrading the firm’s outlook on the bank’s stock to market perform. Raymond James thinks this “will improve investor sentiment and reduce regulatory scrutiny, as the bank searches outside the company for a successor,” the firm said, although noting that “enthusiasm is tempered by still inferior fundamental performance.”
Shares of Wells Fargo initially rose as much as 2 percent in premarket trading but reversed in midday trading on Friday, closing down 1.6 percent at $48.32 a share.
“While managerial change poses risks at an organization undergoing change, it is possible that a new CEO could help enhance the company’s reputation with multiple stakeholders, including regulators,” UBS said. “Hiring an external candidate without ties to the sales scandal and other missteps could lessen criticism from politicians and allow for a more constructive dialogue with regulators.”
Deutsche Bank took the opposite view, downgrading the firm’s rating on Wells Fargo after the announcement.
“Our downgrade reflects our concern that medium term earnings could be less than expected,” Deutsche Bank said.
Here is what all the major Wall Street analysts were saying about Sloan’s departure.