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Bank of America: Financial Winners & Losers

Stocks in this article: BAC

( Bank of America and other stock prices brought current in this update.)

BOSTON ( TheStreet) -- Bank of America (BAC - Get Report) was among the losers of the financial sector Monday after several investment firms offered cautious comments on the bank after it reported second-quarter results.

Bank of America shares sank 3.3% after Goldman Sachs removed the stock from its conviction buy list, saying it saw the least amount of credit improvement when compared to other U.S. banks that have reported quarterly financial results. The firm said it still retains a buy rating on Bank of America.

Bank of America

"We still believe that BAC offers investors compelling value, but given recent earnings results, coupled with ongoing uncertainty over regulatory reform, we do not see a catalyst to prompt near term performance" Goldman Sachs analysts wrote in a research note Monday.

Meanwhile, FBR Capital Markets cut its price target for Bank of America to $18 from $22, noting that the bank's estimate hit to debit fee revenue due to financial reform legislation was greater than many had expected.

"While an impact of this magnitude was worse than we would have guessed, we believe management was not extremely clear in highlighting that this impact is an absolute worst-case scenario and that the ultimate impact should be well better than BAC outlined," FBR analyst Paul Miller wrote in a research note Monday. He reiterated his outperform rating on the stock.

In addition, Rochdale Securities analyst Dick Bove cut his price target for Bank of America to $19.50 from $22.80, citing the expected impact of the new financial legislation on company results.

"The bank hosted a conference call, which was more negative than usual , to review the company's quarterly earnings, last Friday. The tone of the meeting and even the voice of Brian Moynihan, company CEO, was unusually stressed," Bove wrote in a research note Saturday.

Shares of Bank of America were down 46 cents, or 3.3%, to $13.52. The stock has dropped more than 10% over the last week.

On the other hand, Citigroup (C - Get Report) shares rose after Rochdale's Bove upped his 2010 and 2011 full-year earnings estimates for the bank, citing confidence in Citigroup's balance sheet. He notes that Citigroup now has $184 billion in cash on the balance sheet, which is 9.6% of assets.

"It may never report numbers that equal its true earnings capacity, but it is comforting to know that the bank's balance sheet is in a better state than it has been for a considerable period of time," Bove wrote in a research note Sunday.

Keefe, Bruyette & Woods analysts increased 2010 and 2011 full-year earnings estimates for Citigroup, saying that the "Citi story continues to progress with improving asset quality, run-off of Citi Holdings and momentum in its international business."

Citigroup shares were rising 3.1% to $4.02.

Additionally, Bove cut his price target on Goldman Sachs (GS - Get Report) to $170 from $182, one day before the bank is scheduled to report second-quarter results. Bove cited Goldman's $550 million settlement with the Securities and Exchange Commission and a continuation of the pressure on trading activity.

Shares of Goldman Sachs were tacking on 0.3% to $146.62.

Among U.S. bank stocks, Wells Fargo (WFC) slid 1% to $25.98. On the positive side, JPMorgan Chase (JPM) tacked on 0.1% to $39.02, and Morgan Stanley (MS) added 0.2% to $24.78.

Meanwhile, American International Group (AIG - Get Report) named Mark Tucker, former CEO of the U.K.'s Prudential PLC (PUK), to lead its Asian life insurance business. Tucker takes over as head of American International Assurance from Mark Wilson, who has led the company since 2009. AIG said in a statement Monday it would seek to list AIA on the Hong Kong stock exchange.

AIG shares were down 0.8% to $35.35.

-- Written by Robert Holmes in Boston.

Follow Robert Holmes on Twitter and become a fan of on Facebook.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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