Nomura Securities Maintains a 'Neutral' on Bank of America (BAC); 4Q Review

Nomura Securities maintains a 'Neutral' on Bank of America (NYSE: BAC) price target of $8.00.

Analyst, Glenn Schorr, said, "BAC reported EPS of $0.15 vs. Our/Street estimates of $0.18/$0.22. We thought the earnings picture was weak as significant items and reserve release account for more than 100% of EPS and improving macro/mortgage trends, and the announced cost saves will take time. Still, very importantly, BAC showed good capital build (B1 T1c up 121 bps) thanks to the many company actions, and management now expects B3 T1C to be 7.25%-7.50% at YE12, up 50bps from the previous target. While the mortgage-related tail risk is there and business for all large financials is far from booming (“clean” pre-provision of ~$4bn in the qtr is far from BAC targets), this capital progress should shift investor mindset from a BAC capital problem to a BAC earnings problem (how quickly can it ramp) and remove most of the tail risk of a capital raise (good for multiple). We remain Neutral and adjusted estimates; our price target goes to $8 based on 7.0x our 2013E."

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 $6.96 yesterday.

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