The postelection surge in bank stocks appears to have gone too far, prompting Robert W. Baird analysts to turn cautious on the sector, and downgrade Bank of America Corp.

“Take profits and selectively reduce exposure,” analyst David George wrote in a note to clients Wednesday.

George cut his rating on Bank of America to neutral from outperform, although he bumped up his stock price target to $18, which 10% above current levels, from $17. While George likes BofA’s improving operating leverage and prospects for more aggressive capital return, he recommends waiting for a “larger pullback” before adding to positions.

The stock BAC, -2.84% slumped 2% in active trade to snap a five-session winning streak. It had soared 18.6%, from President-elect Donald Trump’s victory through Tuesday, when it closed at an eight-year high. That was the best five-session stretch for the stock since it ran up 19.3% in the five days ending March 19, 2012.

“We think the bank rally post election...has largely discounted potential benefits from rising interest rates, lower tax rates and more aggressive capital return,” George wrote. “We believe investors should book gains and wait for more evidence that the structural improvement in macro trends and regulations will materialize.”

The SPDR Financial Select Sector exchange-traded fund XLF, -2.23% slid 1.4%, after running up 11% in the week since the election. In comparison, the Dow Jones Industrial Average DJIA, -1.92% has now gained 2.9% since the election and the S&P 500 index SPX, -2.37% has tacked on 1.7%.

Shares of the sector tracker’s other more heavily weighted components are also pulled back, with J.P. Morgan Chase’s stock JPM, -1.62% losing 2.5%, Citigroup Inc. shares C, -3.32% shedding 1.5%, Wells Fargo & Co. shares WFC, -3.46% falling 1.7% and Goldman Sachs Group Inc.’s stock GS, -2.87% dropping 2.3%.

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Though not a bank, Warren Buffett’s Berkshire Hathaway Inc. BRK.B, -2.12% is the XLF’s most heavily weighted component, and the investment firm’s stock slipped 0.2%.

RW Baird’s George also downgraded Capital One Financial Corp. to neutral from outperform, and Fifth Third Bancorp to underperform from neutral.