Bank of America (BAC): Last Week's Most Upgraded Stock

Last week's most upgraded stock on Wall Street was Bank of America (NYSE: BAC), according to data at StreetInsider.com's Ratings Insider.

Bank of America received 5 analyst upgrades last week, giving the company an overall 6.4 rating out of 10. Two other companies were tied with 3 upgrades a piece, with the second highest number of upgrades: Abercrombie & Fitch (NYSE: ANF) and Regions Financial (NYSE: RF).

Upgrading Bank of America last week was:

• UBS upgraded Bank of America (NYSE: BAC) from Neutral to Buy and raises their price target to $20 (from $18).
• Macquarie upgraded Bank of America (NYSE: BAC) from Underperform to Neutral.
• Baird upgraded Bank of America (NYSE: BAC) from Neutral to Buy with a price target of $18.
• Bernstein upgraded Bank of America (NYSE: BAC) from Market Perform to Outperform with a price target of $19
• Keefe, Bruyette & Woods upgraded Bank of America (NYSE: BAC) from Market Perform to Outperform with a price target of $20.

In one upgrade report, Keefe, Bruyette & Wood analyst Christopher Mutascio, who upgraded to Outperform, said he has been waiting for a pullback to get more aggressive. Mutascio said the recent drag on bank stocks due to the “lower interest rates for longer” sentiment is not all negative. He explains that anything that rids the sector of momentum investors that have been indiscriminately buying bank stocks simply because "rates are rising" (no fundamental analysis required) could actually be a good thing for value investors. The firm's $20 target price represents a P/E multiple of 11x our 2017 EPS estimate of $1.80.

Meanwhile, Bernstein analyst John McDonald, who upgraded to Buy, notes an attractive entry point with the stock trading at 9.6x their modeled 2016 EPS and just under 1.0x their projected 3Q15 tangible book value of $15.34. McDonald said despite the "low for longer” interest rate risk, there are some levers the company can lean on, including additional cost saves if necessary, a U.S. economy and credit quality backdrop (particularly mortgage) that still remain solid, and capital levels that are strong and building. In addition, the analyst said BofA is positioned to benefit from a handful of potential earnings drivers that could improve over the next year including higher rates, lower expenses, and better trading revenues.

According to Ratings Insider data, shares of Bank of America are up about 0.6% since the first upgrade his last week on 08/24 (KBW). Shares are up 6% since the four additional upgrades hit on 08/25. Still, shares remain 19% below the average price target of $19.25 on Wall Street.

You May Also Be Interested In

• Keefe, Bruyette & Woods Upgrades Trustmark (TRMK) to Outperform
• First BanCorp (FBP) PT Raised to $21 at Keefe, Bruyette & Woods
• Capitol Federal Financial (CFFN) PT Lowered to $6 at Keefe, Bruyette & Woods