Why Bank of America (BAC) Gained Today

NEW YORK (TheStreet) -- A Citigroup analyst upgrade has sent Bank of America (BAC) shares to their highest level in close to three years. The Charlotte, NC-based business soared 2.3% higher to $16.47 during Friday's session, adding to a 3.4% gain a day earlier.

On Thursday, the bank's stock was upgraded in a bullish Citigroup research report to a "buy" rating with a price target of $19 from an earlier $16. The report noted the bank should be able to increase earnings by cutting costs and as the economy improves over 2014.

TheStreet Ratings team rates BANK OF AMERICA CORP as a Buy with a ratings score of B. The team has this to say about their recommendation:

"We rate BANK OF AMERICA CORP (BAC) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income, revenue growth, attractive valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • This stock has managed to rise its share value by 35.61% over the past twelve months. Regarding the stock's future course, although almost any stock can fall in a broad market decline, BAC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • BANK OF AMERICA CORP has shown improvement in its earnings for its most recently reported quarter when compared with the same quarter a year earlier. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, BANK OF AMERICA CORP turned its bottom line around by earning $0.25 versus -$0.02 in the prior year. This year, the market expects an improvement in earnings ($0.88 versus $0.25).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Diversified Financial Services industry. The net income increased by 634.4% when compared to the same quarter one year prior, rising from $340.00 million to $2,497.00 million.
  • BAC's revenue growth trails the industry average of 13.4%. Since the same quarter one year prior, revenues slightly increased by 0.7%. Growth in the company's revenue appears to have helped boost the earnings per share.

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