UPDATE: FBR Capital Markets Upgrades Bank of America Corporation to Outperform, Raises PT as Book Value Growth and Core Earnings Provide Support

In a report published Thursday, FBR Capital Markets analyst Paul J. Miller Jr. upgraded the rating on

from Market Perform to Outperform, and raised the price target from $18.00 to $20.00. In the report, FBR Capital Markets noted, “We are upgrading Bank of America Corporation (BAC) shares to Outperform from Market Perform and raising our price target to $20 from $18, given the belief that our FY15E TBV of $15.61 per share should offer good downside support at existing levels. Given drastically reduced litigation expenses going forward, we think the core earnings power of the company should begin to accrete to existing shareholders, allowing book value growth at a company that has struggled to grow TBV since the crisis. We believe on target cost saves have proven management's ability to execute its strategy to improve shareholder returns, and position the company to potentially generate EPS approaching or in excess of our $1.60 estimate for 2015. As such, we think the shares are likely to garner multiple expansion from existing levels. Following 3Q14 results and in conjunction with our upgrade, we are adjusting our FY15E operating EPS to $1.60 from $1.50. Further, we are also adjusting our FY14E operating EPS to $1.45 from $1.37.” Bank of America Corporation closed on Wednesday at $15.76.