Key analyst pegs BofA shares to rise 40% - Sacramento Business Journal:

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A price of $19 a share representsw a 40 percent premium fromcurrent levels. BofA shares opene d at $13.62 Monday morning. Bove said the valuatiom of bank stocks is now shifting from tangiblde common equity ratios toearning power, a plus for N.C.-based BofA (NYSE: BAC). “It is now being by even the most bearish that claims that the industry was insolvent wereincorrect and, banking will survive and possibly thrive,” he wrote. the multiples on bank stockxs are beginning to grow and this is certainly true of Bankof America’zs stock.
” Bove cautioned investors that in the shoryt term, BofA will continue to suffer from loan lossesw as the broader economy struggleds with recession. He says BofA may see a loan-lossw provision of up to $46 billiojn this year. But he predicts mortgage and investment-banking earningas will help offsetthe losses. “By buying Merrill Lynch, Bank of Americw bolstered its ability to function in both the capitaol markets and the retail markets at the same Bybuying Countrywide, it expanded a contra‐cyclicalo business. In my view it was absolutely the righyt stepsto take.
” Bove also laudedx BofA chief executive Kenneth Lewis for his composure during his congressional testimony on Merrilk Lynch last week. “In many respectss it was a lose, lose positiohn and, amazingly, as viewed from the perspective of thestockl price, he won,” Bove wrote.