NEW YORK (
Bank of America
was the loser among the largest U.S. banking names on Tuesday, with shares sliding over 3% to close at $9.60.
Standard & Poor's reported that its S&P/Case-Shiller Home Price Indices showed continued declines in home prices during January, with the 20-City Composite showing an annual price decline of 3.8%, and 16 out of 19 metropolitan statistical areas (excluding Charlotte, ,N.C., because of delayed data availability) showing price declines from the previous month., with the exception of Miami, Phoenix and Washington, D.C.
S&P said that eight MSAs and both its 10- and 20-City composite indexes hit new lows during January.
KBW Bank Index
declined over 1% to close at 49.61.
Bank of America's shares have now returned 73% year-to-date, following last year's 58% drop.
The shares trade for a discounted 0.7 times the company's reported Dec. 30 tangible book value of $12.95, and for 14 times the consensus 2012 earnings estimate of 68 cents, among analysts polled by Thomson Reuters. For longer-term investors, the shares are attractively priced at eight times the consensus 2013 EPS estimate of $1.07.
Baird Equity Research analyst David George on Tuesday downgraded Bank of America to a neutral rating, while raising his price target for the shares to $10, saying the "risk/reward
was more balanced following ~80% YTD move."
With "capital fears gone," following the company's successful navigation of the
2012 bank holding company stress tests, George said that "the focus will return to core earnings power at BAC. Without the benefit of much higher rates, we have a hard time seeing meaningful upside to intermediate-term EPS potential."
George estimates that Bank of America will earn 65 cents a share this year, followed by EPS of $1.10 in 2013.
Interested in more on Bank of America? See TheStreet Ratings' report card for this stock.
Written by Philip van Doorn in Jupiter, Fla.
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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.