Credit: Shutterstock photoBanking giant Bank of America Corporation ( BAC ) on Friday saw its rating, price target, and earnings estimates cut by analysts at Wells Fargo.
The firm said it downgraded BAC from "Outperform" to "Market Perform" and lowered its price target range from $14-$15 to $9.50-$11.50. That new range suggests an 8% to 30% upside to the stock's Thursday closing price of $8.83.
A Wells analyst commented, "H1 2011 GDP growth rate of 0.9% implies H2 GDP growth of 4%+ to meet 2011 consensus of 2.5%. Also, consensus expectations for Fed Funds (1.25% by FYE 2012) exceed current market expectations (0.25% by FYE 2012). Slower GDP growth and longer period of low rates will weigh on sentiment for U.S. LC bank stocks, in our view, prompting us to reduce our sector rating to Market Weight from Overweight. We are downgrading our rating on BAC to Market Perform from Outperform and cutting our 2011/2012 GAAP EPS estimates to ($0.24)/$1.55 from ($0.19)/$1.80 on expectations of lower economic growth."
Bank of America shares rose 13 cents, or +1.5%, in premarket trading Friday.
The Bottom Line
Shares of Bank of America ( BAC ) have a .45% dividend yield, based on last night's closing stock price of $8.83. The stock has technical support in the $6-$7 price area. If the shares can firm up, we see overhead resistance around the $11 price level.
Bank of America Corporation ( BAC ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 2.8 out of 5 stars.
Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
