2013 Promises to Be Another Strong Year of BofA (BAC) as Investors Focus on Normalized EPS - Evercore

January 2, 2013 11:29 AM EST
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Price: $23.01 +0.39%

Rating Summary:
    24 Buy, 13 Hold, 2 Sell

Rating Trend: Up Up

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Despite being the top performing Dow 30 stock in 2012, Bank of America (NYSE: BAC) is starting the New Year out with a bang helped by bullish analyst commentary.

Evercore Partners analyst Andrew Marquardt added Bank of America to its Conviction List Wednesday, while reiterating an Overweight rating and $13 price target. Marquardt called the stock its top large-cap bank pick for 2013 as it has the "greatest identifiable levers, largest upside to "norm" earnings power, and attractive valuation."

With capital concerns behind the bank and greater confidence in its ability to manage thru mortgage rep/warranty once the given green light to start deploying capital with the 2013 CCAR process, investors will increasingly shift to the bank's earnings power potential, the analyst explains. This is where the fun starts. The firm estimates normalized EPS for the company of $1.69, or 70 percent above the Street. This earnings power will become more evident toward the end of 2013 and into 2014.

Bank of America valuation is also compelling, according to Marquardt. Shares are trading at just 0.8x tangible book value versus 1.4x for peers.

For an analyst ratings summary and ratings history on Bank of America click here. For more ratings news on Bank of America click here.

Shares of Bank of America are up 3.06 percent to $11.97 mid-day Wednesday.

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