Wells Fargo Reiterates an 'Outperform' on Bank of America (BAC); Mortgage Settlement An Incremental Positive

Wells Fargo reiterates an 'Outperform' on Bank of America (NYSE: BAC), Valuation Range lowered to $15-$17 from $16-$18.

Wells analyst says, "BAC's decision to settle outstanding private label putback exposures from Countrywide's (CFC) first lien portfolio will cause a visible loss in Q2 2011 due to $20.6B in anticipated charges. While this was a larger loss than we had envisioned, we view the settlement positively as it significantly reduces a key overhang and sets the stage for a path toward to normalized earnings in 2012-13. We are reducing our 2011 EPS estimate to a loss of $0.19 from $1.07 previously to incorporate the Q2 2011 losses and reduce our 2012 EPS estimate to $1.90 from $1.95 to reflect $8B in additional mortgagerelated litigation and foreclosure costs."

For more ratings news on Bank of America click here and for the rating history of Bank of America click here.

Shares of Bank of America closed at $11.14 yesterday.

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