) --

Bank of America

(BAC) - Get Report

's first quarter earnings are expected to get a lift from strong fixed income trading activity when the bank reports April 19, but investors will need to see stronger evidence of a sustained earnings turnaround at the bank to lift the shares meaningfully past the $10 mark.

Consider, for example, Baird Equity analyst David George, who downgraded Bank of America in a note published Tuesday even while upping his 2012 earnings estimates to $0.65 from $0.50 mainly due to expectations of a strong first quarter.

George and his colleagues explained the discrepancy in the note by stating that they "do not believe the intermediate-term earnings outlook justifies putting new money to work in the stock."

The latest bearish Bank of America call came from London-based Robert Murphy of HSBC, who initiated coverage on Bank of America Wednesday with an "underweight" recommendation and a $6.20 price target, according to


. Murphy's report could not be obtained.

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Analysts as a group are looking for Bank of America to earn 12 cents per share on revenues of $22.77 billion, according to

Thomson Reuters

data. The most bearish estimate calls for a break-even quarter, while the biggest bull is looking for a 20 cent per share gain. In the first quarter of 2011, Bank of America earned 17 cents per share on revenues of $26.88 billion.

Despite a consensus view that securities dealers will post strong first quarter numbers, Bank of America has suffered six downgrades year to date as many analysts conclude the more than 75% rally year to date leaves little room for additional upside.

Evercore analyst Andrew Marquardt sounded a similar note in a March 23 downgrade of Bank of America shares.

"While this quarter may prove better than some expect in terms of capital markets rebound (albeit off easy comps from last quarter), we remain skeptical on the core earnings power longer-term in its ultimately achieving

pretax pre-provision earnings in the $45-50b range (which is already reflected in our 'norm' EPS of $1.95/share)," Marquardt wrote.

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Nonetheless, Marquardt cited "significant expense levers" in his report, and layoffs are expected to be a big contributor. Bank of America had 282,000 full time employees at the end of 2011, according to its 10-K filing last month--down just 2,000 from the end of 2009.

Bank of America said it would eliminate 30,000 positions over the next several years, though that goal was announced after the bank had beefed up to 289,000 at the end of the third quarter last year.

Bank of America's rally this year has come largely as a result of increased investor confidence about the bank's balance sheet. Bank of America has been selling assets such as its Canadian credit card business and a stake in China Construction Bank.

Those and other moves--such as retiring preferred shares by issuing debt and common stock--helped Bank of America pass Federal Reserve stress tests earlier this month, which in turn added strength to this year's rally in the stock.

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The rebound in the shares may make CEO Brian Moynihan's pay package go down a bit more easily with investors. The 52 year-old executive will receive $8.1 million in cash and stock in 2011, according to a regulatory filing on Wednesday using the method of calculating compensation mandated by the Securities and Exchange Commission.

Bank of America's Compensation and Benefits Committee sees things differently, arguing Moynihan's 2011 compensation package actually totaled $7 million.


Written by Dan Freed in New York


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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.