A report by Reuters, citing a person with knowledge of the matter, stated that Wells Fargo & Company (WFC) had fired between 100 and 125 employees in relation with COVID-19 relief fund misuse.
According to David Galloreese, head of Human Resources at Wells Fargo, some of the bank’s employees made “false representations in applying for coronavirus relief funds for themselves,” defrauding the US Small Business Administration.
Wells Fargo shares closed lower for a third consecutive trading session in New York on Thursday. The stock went down 1.29% ($0.30) to $22.95, after touching an intraday low at $22.75, or a price level not seen since September 24th ($22.56).
Shares of Wells Fargo & Company have retreated 57.34% so far in 2020 compared with a 7.82% gain for the benchmark index, S&P 500 (SPX).
In 2019, Wells Fargo & Co’s stock went up 16.75%, thus, it again underperformed the S&P 500, which registered a 28.88% gain.
The misuse was associated with the Economic Injury Disaster Loan program and outside the employees’ roles at Wells Fargo, the bank’s representative noted.
“These wrongful actions were personal actions, and do not involve our customers,” Galloreese said in an internal memo.
Analyst stock price forecast and recommendation
According to CNN Money, the 23 analysts, offering 12-month forecasts regarding Wells Fargo’s stock price, have a median target of $28.10 with a high estimate of $65.00 and a low estimate of $23.00. The median estimate represents a 22.44% upside compared to the closing price of $22.95 on October 15th.
The same media also reported that at least 17 out of 28 surveyed investment analysts had rated Wells Fargo’s stock as “Hold”, while 7 – as “Buy”. On the other hand, 3 analysts had recommended selling the stock.