The $185 million settlement that Wells Fargo & Co WFC 1.2%recently paid related to fraud charges was just a drop in the barrel of the company’s $22.9 billion in annual income. However, according to UBS analyst Brennan Hawken, the scandal has done a lot more damage to Wells Fargo than $185 million.

“After the recent regulatory inquiry and settlement, we believe revenue growth could slow as Wells shifts to new metrics and employees push cross-selling less aggressively,” Hawken explained.

Unfortunately, Wells Fargo will likely stay under the microscope in the near future.

“We have seen scrutiny of other GSIBs intensify after high profile stumbles (the whale trade at JPM seems an apt parallel), and so we do not expect the attention from press, regulators, or politicians to moderate in the near-term,” Hawkins added.

UBS believes overly-optimistic consensus earnings estimates for Wells Fargo don’t yet factor in the earnings headwind that will accompany the scandal.

UBS has lowered…

Click here to continue reading

Want to learn more about how to profit off the stock market? Or maybe you just want to be able to look sophisticated in front of your coworkers when they ask you what you are reading on your Kindle, and you’d prefer to tell them “Oh, I’m just reading a book about stock market analysis,” rather than the usual “Oh, I’m just looking at pics of my ex-girlfriend on Facebook.” For these reasons and more, check out my book, Beating Wall Street with Common Sense. I don’t have a degree in finance; I have a degree in neuroscience. You don’t have to predict what stocks will do if you can predict what traders will do and be one step ahead of them. I made a 400% return in the stock market over five years using only basic principles of psychology and common sense. Beating Wall Street with Common Sense is now available on Amazon, and tradingcommonsense.com is always available on your local internet!