Bank of America: Financial Loser

NEW YORK ( TheStreet) -- Bank of America ( BAC) was the big loser among the largest U.S. financial names on Tuesday, with shares declining more than 4% to close at $8.54.

The major U.S. equity indices lost ground for a fifth straight session on Tuesday as eurozone worries soured sentiment ahead of first-quarter reporting season.

Meanwhile, U.S. Treasury bond prices continued to climb, with the 10-year bond yield dropping below 2%, for the first time since early March. One veteran Wall Street bond portfolio manager blamed "the rain in Spain" as the yield on 10-year Spanish paper in the open market climbed to 5.94% from 5.74%. A week earlier, Spanish 10-year bonds were yielding 5.43%.

The KBW Bank Index ( I:BKX) pulled back over 2% to close at 46.83.

Bank of America's shares have now returned 54% year-to-date, following a 58% decline during 2011.

With the shares dipping 10% over the past week, investors may be looking at a buying opportunity. Bank of America trades for just 0.7 times its reported Dec. 30 tangible book value of $12.95, and for eight times the consensus 2013 earnings estimate of $1.06 a share, among analysts polled by Thomson Reuters.

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FBR analyst Paul Miller on Tuesday reiterated a market perform rating on Bank of America, while raising his price target to $9.00, or 0.7 times the analyst's estimated year-end 2012 tangible book value of $13.08, "as the recent foreclosure settlement has eliminated an overhang on shares.

Miller added that "further regulatory clarity coupled with projections that the company can meet the Basel III capital requirement of 7% Tier 1 common equity by YE12 support a higher price target."

Bank of America is slated to report its first-quarter results on April 19. The average analysts' estimate is for a profit of 12 cents a share.

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.