Financials' Santa Rally Turning Into Cliff Collapse (Update 2)

So not only will $30 million taxpayers face higher taxes for 2012, up to 100 million taxpayers could see a significant delay to their tax refunds. That would be sure to have a dire effect on the economy during the first quarter.

Euphoria and Volatility

Bank of America's shares have now returned 104% year-to-date, following a 58% decline during 2011. Mounting evidence of a sustained recovery in U.S. housing prices, along with the overall economic recovery, have propelled the shares, although they were still down 15% from the end of 2010.

The shares have been quite volatile this year, quickly rising to a closing price of $9.81 on March 20, then sliding to a close at $6.83 on May 21, before continuing a rocky climb to Thursday's closing high of $11.52, so Bank of America could be especially susceptible to the Fiscal Cliff and the possible AMT-driven delays of tax refunds next year.

Bank of America's shares were till discounted at Friday's close, trading for 0.8 times their reported Sept. 30 tangible book value of $13.48, however, the shares appeared relatively expensive in the current environment for large-cap bank stocks, at 11.8 times the consensus 2013 EPS estimate of 96 cents, among analysts polled by Thomson Reuters. The consensus 2014 EPS estimate is $1.25.

BAC data by YCharts

Interested in more on Bank of America? See TheStreet Ratings' report card for this stock.

-- Written by Philip van Doorn in Jupiter, Fla.

>Contact by Email.

Follow @PhilipvanDoorn

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.

« First ‹ Previous 1 2 3