Goldman Sachs Fools Small Investors Again?

Wells Fargo & Co (NYSE:WFC) is another large cap financial institution that Goldman analysts were optimistic about. In their note to investors they projected a 10% rally in 2018, expecting the bank to increase its share buyback program, as well as its dividend. Also, Goldman was sure Wells Fargo would put its regulatory hurdles behind. They got the latter horribly wrong. Wells Fargo & Co (NYSE:WFC) shares took a nosedive on February 5, when the Federal Reserve announced it would impose further penalties on the bank and was prohibiting it from growing any larger than the total assets as of the end of 2017.

Four months later and Wells Fargo & Co (NYSE:WFC) is still marred by controversies. The US Labor Department is investigating whether the company pushed participants in low-cost 401(k) to roll them into more expensive plans. The banks has also been ordered to pay a $1 billion fine for misdeeds related to confusing insurance practices. WFC stock ended Tuesday’s session at $52.56 per share, down 16% since it was added to Goldman’s list.