First Interstate downgraded to Underweight from Equal Weight at Wells Fargo

Wells Fargo analyst Timur Braziler downgraded First Interstate to Underweight from Equal Weight with a price target of $28, down from $30. The firm says that a premium valuation could be at-risk as investor focus shifts towards banks that are able to grow the balance sheet in 2025. Near term, Wells expects First Interstate to continue using bond cashflows to paydown higher cost borrowings, with its model not showing balance sheet growth until the second half of 2025. Additionally, First Interstate’s ALCO disclosures screen as a bit aggressive, as the company shows as the most liability sensitive, although the assumptions around deposit beta are not likely to play out at the magnitude or timeline the disclosure, it adds.