A difficult year for Wells Fargo shareholders will likely get much worse, according to Berenberg.

The firm lowered its rating for the bank’s shares to sell from hold, saying the bank will report earnings below consensus expectations next year. In a note to investors on Thursday, the firm said Wells Fargo has lost the magic it once had generating higher returns than peers, and so will revert to long-term industry averages.

“We believe that Wells Fargo (WFC) has become too big to differentiate itself from wider market trends and deliver the growth which management promises and the market expects,” analyst James Chappell wrote in the note. “We have cut our EPS forecasts to reflect a weaker outlook for revenues driven by a number of factors including weak demand for credit, rates lower for longer and a weaker non-interest income outlook.”

Wells Fargo stock price was down less than 1 percent in Friday’s premarket.

Chappell reduced his 12-month price target to $35 from $45 for Wells Fargo shares, which would be a 36 percent decline from Thursday’s close. His new price forecast is the lowest on Wall Street, according to FactSet.

Wells Fargo has underperformed the market this year. Its shares are down 0.5 percent year to date compared with the S&P 500’s 10.5 percent gain through Thursday.

Wells Fargo has the biggest share of the U.S. commercial real estate lending and auto loans businesses. “Once banks became so large, few economies of scale or scope exist and organizational control becomes much more difficult,” Chappell wrote.

He predicts Wells Fargo will generate 2018 earnings per share of $3.81 versus the Wall Street consensus of $4.46.

Only 19 percent of Wall Street analysts have sell or underweight ratings on Wells Fargo, according to FactSet.

Wells Fargo did not immediately respond to a request for comment.

— CNBC’s Michael Bloom contributed to this story.