UBS: 'Headwinds could persist' for Wells Fargo after the fake account scandal killed its stock last year

Wells Fargo's troubles keep getting worse.

So far, the bank has agreed to pay a $190 million settlement, return $2.8 million to at least 1.4 million additional customers, and lost its CEO.

Despite the cooperation with regulators and reparations payments, Swiss bank UBS says its analysis "suggests revenue headwinds could persist," and has lowered its price target by $3 to $56.

"The data does not yet suggest a recovery in customer engagement," analysts Saul Martinez and David Eads said in a note Friday. "We do not think that cost reduction and capital management benefit EPS momentum in '19. Nonetheless, tangible evidence than an earnings recovery is forthcoming is needed for the current valuation discount to narrow."

Beyond the scandals that have plagued the California-based bank for over a year now, its digital game is struggling too, failing to keep up with competitors like Chase and Bank of America.

"Wells' app download share has not shown signs of recovery vs Chase and Bank of America after declining meaningfully in 2H16 (though recent news flow has seemingly not had a negative impact either)," the bank said. "Somewhat more encouragingly, employee satisfaction scores have recovered since early '17 and now stand moderately above the peer group average."

Wells Fargo's stock took a substantial hit when the fake accounts were first made public, hitting a 52-week low of $43.55 last year.

"Fallout from the sales fraud/other missteps created above average uncertainty about the financial outlook," UBS said.

Shares of Wells Fargo rose 0.72% in trading Friday, closing at $51.66 - 8.4% below UBS' target.