Wells Fargo & Co. shares plunged $5.625 Wednesday after Goldman, Sachs & Co. analyst Robert Albertson downgraded the California company.
Including Tuesday's $2.125 decline, which came after the company released a modest earnings report, Wells Fargo stock declined 5% the last two days. It closed at $147.
Fourth-quarter earnings were up 12%, but that included a reduction in loan-loss provision.
Mr. Albertson reduced his 1995 earnings per share estimate 25 cents to $16.25, and his 1996 estimate 50 cents to $18.
"While loan growth has revived, total earning assets are expected to stay flat as loans are funded entirely out of other liquid assets," he said.
Wells Fargo's large share repurchase program slows down core revenue growth, he added.
The Goldman analyst still remains high on the stock, which has been one of the industry's top performers the last two years. Mr. Albertson predicted it would increase 18% to $180 in 12 months.
And he emphasized that the downgrade to "moderate outperformer" from "recommended list" was not a reflection of the California economy, which he believes is improving.
Other major bank issues were also down Wednesday, as the industry continued the slide that began Tuesday with a wave of negative earnings reports.
J.P. Morgan & Co. slid $1 to $59.625 after a report out of London said the money-center was a candidate to buy the British investment bank S.G. Warburg Group PLC.