Friday, October 23, 2009
Another Reason to Turn Off That Business Channel
from the WSJ
Prominent banking analyst Dick Bove, who caused a stir Wednesday with seemingly contradictory remarks on Wells Fargo, has decided he’ll no longer provide immediate earnings commentary on air.
“I’m not going to do it anymore. I’m going to have to see the numbers before I go on air,” Bove told Dow Jones Newswires Thursday. “It creates an untenable situation.”
Appearing on CNBC immediately after the San Francisco bank’s 8:00 a.m. EDT Wednesday earnings release, the Rochdale Securities analyst included Wells among “standout” banks when asked to name a few. Bove, who appears regularly on business news programs, said the earnings news suggested Wells had its loan losses “under control.” The comments left many with the impression that Bove
favored the bank.
Later in the day, Bove made waves when he downgraded Wells to “sell” from “neutral.” In an interview Wednesday with Dow Jones Newswires immediately after the downgrade, Bove called the bank’s earnings “pretty poor,” and said mortgage hedging and unsustainable tax cuts inflated earnings.
The downgrade sent Wells shares sharply lower, and weighed on the broader stock market.... The Dow Jones Industrial Average finished the session lower after spending most of the day in positive territory.
Bove, a prolific analyst who is widely followed but doesn’t usually generate such a big reaction with his research, said Thursday that it took him six hours to digest Wells Fargo’s quarterly earnings after his CNBC appearance. He also acknowledged the risks of rapid-fire earnings comments on television.
“Once I went through the numbers, it was evident to me that this company’s earning power was lower,” Bove said Thursday.
Late Wednesday, he had said that what CNBC wants “is a quick reaction to a number, that’s what they want,” contending there wasn’t a conflict between the statements.
CNBC declined to comment Thursday on Bove.
Bove appeared on Fox Business Network Thursday morning. He recapped his Wells Fargo downgrade and discussed banking earnings, though he didn’t mention PNC