Wednesday's bank stock loser was Bank of America (BAC), with shares declining 3% to close at $7.77, after Sanford Bernstein analyst John McDonald cut his rating on the shares to "Market Perform" from "Outperform."
Bank of America's shares have returned 40% year-to-date, after falling 58% last year.
The shares trade for 0.7 times tangible book value, according to HighlineFI, and for 11 times the consensus 2012 earnings estimate of 71 cents.McDonald's price target for Bank of America is $9.00. The analyst downgraded the shares "after a strong YTD rally appears to have taken capital raise fears out of the stock" and while he continues to see long-term upside for the shares, he believes "it will take time for BAC's earnings power to recover amid low interest rates, loan runoff, and a long tail to elevated mortgage-related expenses. McDonald estimates that Bank of America will earn 65 cents a share in 2012, followed by EPS of $1.15 in 2013. Interested in more on Bank of America? See TheStreet Ratings' report card for this stock.
Philip van Doorn. To follow the writer on Twitter, go to http://twitter.com/PhilipvanDoorn.
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