Bank of America is Suddenly Unstoppable

[Stocks-to-Watch]

Bank of America (BAC) stock is up more than 31% this year, including a 3.5% gain this morning. Day in and day out, the stock is outperforming its peers, in an almost exact reversal of its performance last year when BAC would tend to trade with other big banks, but always tended to underperform.

The bank’s fourth quarter results, which it released last week, presented a mixed bag. Its earnings power remains hamstrung by weak loan growth, trading results and low net interest margins, but the bank’s balance sheet continues to improve. Those improvements are giving investors more confidence that Bank of America won’t have to raise additional capital and seem to be helping boost the stock.

Since the earnings release, numerous analysts have lowered their target prices on the stock, with Sandler O’Neill analyst Jeff Harte dropping his target to $11 from $14 on Friday as the bank’s earnings power has tailed off considerably. Sterne Agee analyst Todd Hagerman lowered his target to $6 from $7.



Original Article Source by Barrons.com