Drawing a Bead on Bank of America

Stock analysts aren't much help, either. While many are bullish on B of A in a pro-forma sense, they recognize the uncertainty that lies ahead, and ratings often carry several caveats.

The average analyst estimate is for Bank of America to earn 9 cents per share this quarter, according to Thomson Reuters, but estimates range from a 5-cent per-share loss to a 26-cent per-share profit. For all of 2010, the average estimate is 82 cents per share, with forecasts ranging of 20 cents to $1.60 in profit per share.

Bank of America estimated its per-share book value at $21.48 at the end of 2009, and its tangible book value at $11.94. Its stock closed at $16.39 on Tuesday, and its 50-day moving average stock price is $15.66. Based on the average analyst's 2010 earnings estimate, and yesterday's closing price, that makes Bank of America more expensive than most big-bank peers outside of Citigroup(C), including JPMorgan, Wells Fargo(WFC), U.S. Bancorp(USB), Goldman Sachs(GS) and Morgan Stanley(MS).

Bove has a "buy" rating on Bank of America stock, and said on Tuesday that it may double in price. But he also said its business model is "deeply flawed" and based some of his math on what Bank of America could earn in a "more normal economy" with a loan-loss provision of roughly one-fifth of what the bank had reserved at the end of 2009, and securities yielding much more than current levels allow.

So what does all this mean for Bank of America shares? They may have a lot of potential, but it's unclear how they will get there, or how long that will take.

-- Written by Lauren Tara LaCapra in New York

>To order reprints of this article, click here: Reprints