Bank of America
Bank of America reported first-quarter net income of $653 million, or three cents a share, however, the results included "negative valuation adjustments of $4.8 billion pretax, or $0.28 per share, from the narrowing of the company's credit spreads."
CFO Bruce Thompson pointed out that "the narrowing of our credit spreads reflects the significant progress we've made to strengthen the balance sheet," and said that the negative adjustment to earnings "should not overshadow the positive momentum that we are seeing in our businesses."Mosby rates Bank of America a Buy, and said on April 19 after the company announced its first-quarter results that excluding the debit valuation adjustment and an estimated "$2 billion in significant items included in this quarter's earnings," brought "BAC's operating EPS down to $0.15, 3 cents favorable to our estimate of operating earnings per share of $0.12." The analyst said that "until short-term rates begin to rise, BAC's earnings power is between $10 billion and $12.5 billion a year." Bank of America's shares closed at $8.25 Friday, returning 49% year-to-date, following a 58% decline during 2011. The shares trade for just 0.6 times their reported March 31 tangible book value of $12.87, and for eight times the consensus 2013 EPS estimate of $1.05. The consensus 2012 EPS estimate is 61 cents. Mosby rates Bank of America a "Buy," with an $11 price target, and said that "current discount to tangible book value per share represents the potential upside once the market decides that BAC can cover future losses from Countrywide's residential real estate overhang issues with future earnings." Guggenheim Securities has "calculated a range for potential remaining after-tax losses of $15-40 billion." Interested in more on Bank of America? See TheStreet Ratings' report card for this stock.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $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
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV