NEW YORK ( TheStreet) -- Guggenheim Securities analyst Marty Mosby expects a very solid first quarter for large-cap U.S. banks.
The analyst expects the 16 large-cap banks covered by his firm "to exceed market expectations by 6% in 1Q12 and produce 4% sequential EPS growth," through accelerated mortgage refinancing, "a rebound in investment banking activities, and a favorable impact from improved market valuations on trust and investment fees," along with continued credit quality improvement.
Guggenheim on Wednesday upgraded Bank of America (BAC) to a "Buy" rating from a neutral rating, while maintaining his $11 price target, saying that the shares "have traded down 15%, since peaking at $10 following the company's successful result from the Federal Reserve's annual stress tests in March, creating "a 29% upside potential to our price target, which we believe, even with BAC's heightened risk profile, justifies a BUY rating."
Bank of America's shares have returned 54% year-to-date, through Tuesday's close at $8.54, following a 58% decline during 2011. Putting those numbers in perspective, the shares are down 36% over the past 52 weeks.
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