Bank of America Cut by Analysts as Layoffs Loom

NEW YORK (TheStreet) -- Bank of America(BAC)'s woes continued Friday as three analysts lower their target prices and The Wall Street Journal reported the bank could slash as many as 40,000 jobs.

Bank of America has said publicly it is letting go 3,500 employees globally, and a top-to-bottom review dubbed "Project BAC" had widely been reported to lead to another 10,000 cuts. While there had been rumors the number could be far larger, The Wall Street Journal's report lends further credibility to that speculation, though it cites anonymous sources. A bank spokesman did not respond to an e-mail inquiry from TheStreet asking about the report.

As for the analysts, they all retained favorable ratings on the bank despite their lower targets.

JPMorgan Chase's Vivek Juneja slashed his target to $13 from $18 but retained an "overweight" rating. Juneja cited a lower earnings outlook and "continued political and legal uncertainty near-term" in reducing his price, but he defended his "overweight" recommendation, contending Bank of America "has among the highest appreciation on a longer-term basis as earnings normalize and fears abate." His cuts came as part of a more than 30 page report on the large cap bank sector.

Marty Mosby at Guggenheim Securities dedicated nearly 20 pages just to Bank of America in cutting his target to $10 from $11 while retaining a "buy" recommendation. He lowered 2011 earnings estimates by three cents to a 17 cent loss and dropped 2012 earnings by four cents to a profit of $1.33 to reflect expenses related to a $5 billion preferred stock investment by Berkshire Hathaway(BRK.B) announced last month.

In reducing his target, Mosby cited "the market's current lack of appetite for risk and the extended period of time we expect it to take to resolve the residential real estate overhang issues."

Another analyst who lowered his price target was David George of Robert W. Baird & Co. George dropped his target to $11 from $12 while maintaining an "outperform" recommendation, according to Bloomberg. The report could not immediately be obtained.