UPDATE: Morgan Stanley Upgrades Bank of America to Overweight on Raised 2014 EPS
In a report published Tuesday, Morgan Stanley analyst Betsy L. Graseck upgraded the rating on Bank of America (NYSE: BAC) from Equal-Weight to Overweight, and raised the price target from $13.00 to $16.00.
In the report, Graseck noted, “Raising EPS by 6-11% (now 10% above consensus in 2013-14, 30% above in 2015) on higher mortgage fees (4%), lower NCOs (5%), and lower expenses (2%). BAC is shifting resources to mortgage originations, raising 2016e share from 7% to 10%. Rising House Price Index is accelerating legacy asset workouts & lowering NCOs. Raising PT by $3, to $16, or 0.7x 2014e BVPS on 7% ROE in 2014. Further upside in 2014 as 2015 ROE gets to 9%. We see the market as pricing in 5.1% ROE.”
Bank of America closed on Monday at $11.72.
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