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.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV