According to Graseck, Bank of America will poach mortgage market share from Wells Fargo (WFC), "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) 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) 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%.
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
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