UBS downgrades Wells Fargo, says recent hot streak has gone far enough

A man walks past a Wells Fargo Bank branch on a rainy morning in Washington.
Gary Cameron | Reuters

Wells Fargo no longer looks cheap compared with its rivals and it's time to tap the brakes on its rally, according to UBS.

Wells Fargo has lagged behind peer banks in recent years, weighed down by a fake accounts scandal that led to the Federal Reserve imposing an asset cap on the bank. However, the stock has surged in 2021 and outperformed other major banks.

UBS analyst Saul Martinez said in a note to clients on Tuesday night that that winning streak has gone far enough, and he downgraded Wells to neutral from buy.