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June 24 (Reuters) - Ladenburg Thalmann analyst Richard Bove cut his earnings estimates and price target for U.S. mortgage lender Wells Fargo & Co (WFC.N), citing a tightening consumer environment that curbed discretionary spending and made debt repayments difficult.
Bove, who cut his price target on the stock to $29 from $37, said Wells Fargo had likely entered a period of lower earnings capacity as its key products like home equity, autos and credit cards were experiencing rising delinquencies.
“Additionally, Wells Fargo is a large provider of funds to the mortgage markets and it owns a national consumer finance company, which is by definition non-prime in nature,” Bove wrote in a note to clients.
However, the analyst expects the company to take advantage of the current economic situation by buying banks that are selling below their liquidation values, but added that the company was “doing nothing” about it.
Bove, who maintained his “buy” rating on the stock, cut his earnings estimates for 2008 by 27 cents to $2.19 per share, and for 2009 by 25 cents to $2.46 a share.
Shares of the company closed at $24.26 Monday on the New York Stock Exchange. (Reporting by Esha Dey in Bangalore; Editing by Himani Sarkar)