Expectations for further loan losses has led a Deutsche Bank analyst to cut his 2009 and 2010 earnings estimates for Wells Fargo & Co.
The analyst, Mike Mayo, reduced his estimates on the bank based on an uncertain economic outlook and an increase in loan-loss expectations.
Mayo cut his 2009 earnings estimate to $1.70 a share from $2 a share. He cut his 2010 estimate to $2.80 a share from $3.10 a share. The average forecast of analysts polled by Thomson Reuters was earnings of $1.75 a share for 2009 and $2.75 a share for 2010.
He estimates that for the fourth quarter, Wells Fargo will lose 27 cents a diluted share. The estimate includes $4 billion in pretax merger-related expenses, which translates to about 66 cents a share after taxes, he wrote in the note.
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