NEW YORK ( TheStreet) -- Bank of America could require an additional $32 billion to address mortgage-related losses beyond the $35 billion it has already either recognized or stashed away in reserves, but the bank's shares remain a "buy," according to a research report from Citigroup published Thursday.

"One could take the view that even if it is $32 billion of costs, when you factor in the earnings power and the time it will take to resolve these issues it appears to be manageable," writes Citigroup analyst Keith Horowitz.

Horowitz sees $32 billion as a worst case, with $12 billion as a more likely scenario, in summarizing his 53-page analysis of the mortgage problems that have plagued Bank of America. Bank of America itself has indicated it may need another $5 billion above existing reserves.

Horowitz notes equity markets are pricing in a large equity offering, and Deutsche Bank analyst Matt O'Connor has been arguing Bank of America may need to raise as much as $15 billion this year, though much or possibly all of that could come as part of an exchange for preferred shares, making it less dilutive. Horowitz argues that whether or not Bank of America needs to raise equity will depend upon the degree of faith regulators have in the bank's ability to fill the gap through earnings.

Despite reiterating his "buy" rating, Horowitz cited his analysis of the mortgage issues, as well as the effects of a weak trading environment on Bank of America's investment banking revenues, in reducing his price target to $8 from $9.

-- Written by Dan Freed in New York.

Follow this writer on Twitter.

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