This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Bank of America Has 37% Upside: Morgan Stanley (Update 2)

According to Graseck, Bank of America will poach mortgage market share from Wells Fargo (WFC - Get Report), "whose market share we already forecast to decline from ~35% at 1Q12 to ~20% by 2016."

"BAC's market share is already up 130 bp from trough levels in 1Q12 to 5.6% in 1Q13; we expect it to rise to ~7% by 4Q13, 8% in 2014, and 10-12% long term, in line with BAC's deposit market share but below BAC's peak market share of 18-20% in 2009-10 post exiting wholesale and correspondent channels," she wrote.

Based on Monday's close, Bank of America's shares were trading for 9.1 times the consensus 2014 earnings estimate of $1.29 a share, among analysts polled by Thomson Reuters. The consensus 2013 EPS estimate is 97 cents. That's a projected earnings increase of 33% for 2014, which is the highest among the "big four" U.S. banks, although, of course, Bank of America's estimated earnings increase comes from a pretty low base, with a first-quarter return on average assets (ROA) of 0.48% for the first quarter.

Here's how ROA and forward P/E ratios compare for the rest of the big four:

  • Shares of Wells Fargo closed at $36.73 Monday, trading for 9.4 times the consensus 2014 EPS estimate of $3.90. The consensus 2013 EPS estimate is $3.70. The company's first-quarter ROA was a strong 1.49%.
  • Shares of JPMorgan Chase (JPM - Get Report) closed at $$47.35 Monday, trading for 8.0 times the consensus 2014 EPS estimate of 5.93. The consensus 2013 EPS estimate is $5.67. The company's first-quarter return on assets was 1.14%.
  • Citigroup (C - Get Report) closed at $45.15 Monday, trading for 8.5 times the consensus 2014 EPS estimate of 5.31. The consensus 2013 EPS estimate is $4.68. The company's first-quarter ROA was 0.62%.

BAC Chart 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.

RELATED STORIES:



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.
4 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
C $53.07 0.00%
BAC $15.56 0.00%
JPM $62.84 0.00%
WFC $54.05 0.00%
AAPL $124.75 0.00%

Markets

DOW 17,826.30 -279.47 -1.54%
S&P 500 2,081.18 -23.81 -1.13%
NASDAQ 4,931.8150 -75.9760 -1.52%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs