Updated from 2:52 p.m. ET.NEW YORK ( TheStreet) -- MBIA (MBI - Get Report) bulls continue to recommend the shares after they got a much anticipated pop last week when the monoline bond insurer settled litigation with Bank of America (BAC - Get Report) and Societe Generale, but it's hard to see what will drive the shares higher in the near term.
MBIA took a step closer toward reestablishing National's business when it received an upgrade to its credit rating from Standard & Poor's. "Our positive view of MBIA was always predicated on the view that National Public Finance would one day be unencumbered to its sister company. We now believe we will see this day soon," wrote MKM Partners analyst Harry Fong in a May 6 report. On May 9, Fong upped his price target on MBIA to $20 from $18, according to Bloomberg data. That said, Fong wrote in the same May 6 report that it would take "some time," for MBIA to monetize the value of National Public Finance. Weighing down National Public Finance has been MBIA's structured finance unit, MBIA Insurance. MBIA Insurance guaranteed mortgage backed securities, which played a central role in the 2008 housing bust. BTIG's Palmer assigns no value to that unit, because much of its value is still dependent on outstanding litigation involving ResCap, the bankrupt mortgage unit of Ally Financial and Credit Suisse (CS), among other parties.