Bank of America (BAC) at an Inflection Point - Goldman Sachs
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Goldman Sachs analyst Richard Ramsden sees an inflection point for Bank of America (NYSE: BAC) and reiterated a Conviction Buy List rating and price target of $17 after hosting an investor meeting with BAC Chairman and CEO Brian Moynihan on Wednesday.
"We believe that BAC is on the cusp of an inflection in operating leverage as revenue growth and cost reductions appear set to occur concurrently," he said.
"Historically, cost cuts have largely been offset by revenue attrition. However, BAC is now lapping many of its legacy revenue headwinds (i.e. portfolio divestures, loan run offs and footprint rationalization) as recent investments in the consumer and corporate franchises are beginning to bear fruit," he added.
They continue to believe that a 10% ROTCE is achievable (even without higher interest rates), and, with the stock trading at a P/TBV of 0.9x, they see valuation as compelling.
Shares of Bank of America closed at $15.40 yesterday.
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Related EntitiesGoldman Sachs Conviction Buy List, Goldman Sachs, Bank of America
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