Credit Suisse downgrades Wells Fargo, says higher rates are priced into the stock

A customer leaves an ATM at a Wells Fargo branch in Denver.
Rick Wilking | Reuters

Credit Suisse on Thursday downgraded Wells Fargo to neutral from outperform, telling clients the shares might be fully valued now that the stock has reached Credit Suisse's 12-month price target of $56.

In the past three months, shares of the financial company are up 13 percent with the stock closing Wednesday at a record $58.55.

The rally in Wells Fargo and the rest of the financial sector was driven by investor expectations for deregulation in the industry, higher interest rates and lower corporate taxes under President Donald Trump.

Given the recent gains, however, Credit Suisse says investors might begin to focus on valuations and some continued fallout from Wells Fargo's cross-selling scandal.