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Nomura Initiates Coverage on Bank of America

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In a report published Thursday, Nomura analyst Steven Chubak initiated coverage on Bank of America (NYSE: 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.

Posted-In: Nomura Steven ChubakAnalyst Color Initiation Analyst Ratings

 

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