Bank of America (BAC) Attractive Given Recent Sell-Off, Upgraded to Outperform at Bernstein

(Updated - August 25, 2015 8:07 AM EDT)

Bernstein upgraded Bank of America (NYSE: BAC) from Market Perform to Outperform with a price target of $19. Analyst John E. McDonald sees more attractive risk-reward given the recent sell-off.

"Upgrade BAC to Outperform, as sell-off has made risk/reward more favorable, providing a more attractive entry point to recovering franchise with longer term potential to benefit from higher rates, improved operating leverage, and expanding capital return," said McDonald.

"Slowing global growth and continued low rates present risks to our EPS, but we believe BAC has some levers to lean on, including additional cost saves if necessary, U.S. economy and credit environment that still remain solid, and strong capital levels," continued the analyst.

McDonald added, "Longer term, with some help from higher rates in '16/'17, we think BAC can hit its target 1% ROA, which implies EPS of ~$1.87 and ROTCE of ~12%. Our PT of $19 (unchanged) implies upside of 24% and a P/TBV of 1.1x on projected YE'16 book value."

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 $15.29 yesterday.

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