UBS Maintains a 'Neutral' on Bank of America (BAC); Swallowing the Bitter Pill
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Price: $63.89 -0.93%
Rating Summary:
26 Buy, 18 Hold, 2 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 12 | Down: 23 | New: 22
Rating Summary:
26 Buy, 18 Hold, 2 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 12 | Down: 23 | New: 22
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UBS maintains a 'Neutral' on Bank of America (NYSE: BAC), PT lowered from $13.50 to $12.
UBS analyst says, "We are lowering our 2011 estimates for BofA to a $(0.20) loss from earnings of $1.05, driven by the 2Q settlement and corresponding accrual, GW write-down, elevated rep and warranty losses, and higher operating expenses. We are lowering our 2012 estimate to $1.35 from $1.50 due to our expectation for higher rep and warranty losses and an elevated operating expense
base."
"Precedent for other potential settlements now established - Given this was the first large settlement of private label RMBS claims, we believe it sets an effective precedent for peers. We estimate that loss rates from the BofA settlement could mean losses of $10 billion for JPMorgan (NYSE: JPM) (offset by our estimate of $5 to $6 bn in reserves, $0.76 per share net) and $2.4 billion for Citi (NYSE: C) ($0.58 per share)."
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.
UBS analyst says, "We are lowering our 2011 estimates for BofA to a $(0.20) loss from earnings of $1.05, driven by the 2Q settlement and corresponding accrual, GW write-down, elevated rep and warranty losses, and higher operating expenses. We are lowering our 2012 estimate to $1.35 from $1.50 due to our expectation for higher rep and warranty losses and an elevated operating expense
base."
"Precedent for other potential settlements now established - Given this was the first large settlement of private label RMBS claims, we believe it sets an effective precedent for peers. We estimate that loss rates from the BofA settlement could mean losses of $10 billion for JPMorgan (NYSE: JPM) (offset by our estimate of $5 to $6 bn in reserves, $0.76 per share net) and $2.4 billion for Citi (NYSE: C) ($0.58 per share)."
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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