Credit Suisse analyst Moshe Orenbuch on Wednesday downgraded Bank of America to a neutral rating from an "Outperform" rating, even though he raised his price target for the shares by a dollar to $12.00, saying that the stock's "current valuation appears to be ahead of the company's near to intermediate-term performance and appears to be discounting significantly faster improvements in efficiency than we would be expecting." Orenbuch said that "At its current valuation, the shares appear to be discounting at least a 16% improvement in costs over the next year vs. our estimate of 10%," and that "despite the announced mortgage servicing sales, it will take until 2014 for the annual run-rate of expense saves. Separately, we think it will be hard for Bank of America to grow revenues faster than the 'average' bank." Bank of America will report its fourth-quarter results on Jan. 17. The company announced on Monday that it expected its fourth-quarter earnings to be "modestly positive," as a result of its mortgage putback settlement with Fannie Mae ( FNMA) and because of its participation in an $8.5 billion mortgage foreclosure settlement with federal regulators. The company on Monday also announced that Fannie Mae, Freddie Mac ( FMCC) and Ginnie Mae had agreed to allow it to sell servicing rights on 2 million residential mortgage loans, with an unpaid balance of $306 billion. Orenbuch provided some optimism by saying that "if BAC is able to get an additional 5 percentage point improvement in the efficiency ratio, this would correspond to $0.30 in EPS, and over 200 bps in return on tangible equity ," which would be "sufficient to have the shares be attractive at current levels." "However, this represents about 40% of Legacy Assets & Servicing costs, which will likely take through 2015 to achieve that level of reduction," he said. Orenbuch estimates that Bank of America will earn $1.08 a share in 2013, with EPS increasing to $1.40 in 2014. Interested in more on Bank of America? See TheStreet Ratings' report card for this stock.