Bank of America: 76% Year-to-Date Stock Jump Winner

NEW YORK ( TheStreet) -- Bank of America ( BAC) was the winner among the largest U.S. banking names on Friday, with shares rising 6% to close at $9.80.

The broad indexes were mixed, after the Labor Department reported that its consumer price index rose 0.4% in February, higher than the expected 0.2% gain, according to Thomson Reuters, following a 0.2% increase in the prior month. Excluding gas and food prices, the core figure inched up 0.1%, easing fears of inflationary pressure outside of energy prices. Economists had forecast a 0.2% gain in prices.

The KBW Bank Index ( I:BKX) rose 1% to close at 49.74, with the 24 index components roughly split.

In the continuing euphoria following its strong results in the Federal Reserve's annual stress tests, Bank of America's shares were up 22% for the week. The shares have now returned 76% year-to-date.

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The chart shows how volatile the shares have been, and the 52-week return as of Friday's close was a negative 28%.

Bank of America's shares now trade for 0.8 times tangible book value, according to HighlineFI, and for 14 times the consensus 2012 earnings estimate of 69 cents. The consensus 2013 EPS estimate is $1.19.

In a report discussing his firm's top picks among financial stocks, JPMorgan analyst Vivek Juneja on Friday reiterated his "Overweight" rating for Bank of America, with a $10.50 price target, saying the name was a good long-term bet because the "Fed stress test confirms no need for capital raise," and because the company is the "most levered to recovery in US economy as largest US bank with higher credit related issues than peers."

Juneja also said that Bank of America had recently made "progress on mortgage related issues," was benefitting from cost-cutting, and that it "should benefit from improved trends in trading."

The analyst matches the consensus in estimating that Bank of America will earn 69 cents a share this year, but is slightly behind the consensus, with an 2013 EPS estimate of $1.15.

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 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.