First Impressions These Analysts Have Post-Stress Test

In a report published Thursday, RBC Capital Markets analysts maintained an Outperform rating on

, with a price target of $19, mentioning first impressions of the company's 2015 CCAR capital plan. The company has announced that the Feb has given its capital plan conditional approval. The plan includes buybacks worth $4.0B of common stock as well as a stable quarterly dividend of $0.05 per share. The condition laid down, however, is that the company would need to resubmit its capital plan by the end of September, "after it addresses certain weaknesses identified in its capital planning process," the analysts wrote. "While the conditional approval was unexpected and disappointing, particularly after management had an independent third-party review its CCAR processes and models last Spring, we are encouraged that the company can proceed with its quarterly buyback plans in 2Q15 while preparing its resubmission," the report mentioned. Last year, the company increased the dividend from $0.01 per share to $0.05 per share. Taking into account this hike, the analysts had expected management's focus to "shift towards reinstating share repurchases." However, since the company was unable to significantly strengthen its capital position last year on account of legal settlements, the analysts were "not surprised" by the modest buyback request. "Assuming BofA's proposed capital distributions are not restricted, we estimate that it will payout roughly 33% of our projected earnings from 2Q15-2Q16. As a result, the company will continue to accumulate capital, which should help to build its severely stressed Tier 1 common ratio beyond the 7.1% calculated by the Fed this latest CCAR cycle (including capital actions). Furthermore, we expect BofA to deliver greater earnings consistency going forward, and accordingly we look for it to return more capital to shareholders over time," the analysts added.