Bank of America (BAC) Past the Worst of Mortgage Mess - Evercore Partners

May 7, 2013 7:00 AM EDT
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Price: $23.01 --0%

Rating Summary:
    24 Buy, 13 Hold, 2 Sell

Rating Trend: Up Up

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    Up: 0 | Down: 0 | New: 0
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Evercore Partners Andrew Marquardt reiterated an Overweight rating and $14 price target on Bank of America (NYSE: BAC) following the announced settlement with MBIA.

The firm notes while there are lingering rep/warranty costs that are likely to remain elevated, Bank of America is "past worst in terms of mortgage mess given multiple settlements over past few years incl roughly $30b in mortgage related settlements since the beginning of '10 (See Fig 1 ) and $14.1b in total rep/warranty reserves at 1Q13 (of which $8.5b is allocated to the pending private label settlement) as well as (undisclosed) litigation reserve which BAC could have built up over time given roughly $9.9b in aggregate litigation expenses since '10."

Next up for the company is the private label settlement hearing in a New York State court starting on May 30th. According to press reports, Attorneys General from New York and Delaware recently stated that they will not seek to block the $8.5b private label settlement as investors have benefitted from litigation, the analyst notes.

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 closed at $12.88 yesterday.

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