Nomura Initiates Coverage on Bank of America at Buy, $19.00 PT

In a report published Thursday, Nomura analyst Steven Chubak initiated coverage on Bank of America Corp. BAC at Buy, with a $19.00 price target. According to the report, multi-year capital / cost initiatives have prepared BAC for a tougher capital regime, and its strong position supports meaningfully higher payouts vs. peers. “ BAC's current business mix, improving efficiency, and higher rate sensitivity should support ~15% mid-cycle returns (on required capital) by 2016. Legal costs should remain elevated, but analysis suggests BAC is only moderately under-reserved for remaining Private Label exposure,” the report said. Some highlights from the report included: -Long-term ROE potential of ~15% supports TP of $19, or 14% potential upside. -FY13E EPS at $0.89. -FY14E EPS at $1.27. BAC closed Wednesday at $16.70.