This rallying bank stock received a ‘downgrade’ from Baird

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in… read more.
on Nov 1, 2021
  • Baird's David George says Bank of America shares could slide to $42.
  • Joe Terranova disagrees with the bearish call on CNBC's "Halftime Report".
  • Peter Najarian expects the stock to climb well above $55 over the next year.

Shares of Bank of America Corp (NYSE: BAC) have gained more than 10% since October 1st, but Baird & Co warns the momentum won’t sustain in the coming months.

Analyst David George sees a 12% downside

In a research note this morning, Baird’s David George downgraded the stock to “underperform” with an unchanged price target of $42 that represents a 12% decline from here.

Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.

The analyst cited “unattractive” risk/reward and elevated expectations for his bearish call. He agreed that the investment bank has, fundamentally, performed well, but said there were other names with better opportunity than the BofA at the moment.

George, therefore, sees the recent rally in the Bank of America shares as an opportunity to sell. The stock is down about 1.0% on Monday.

Traders disagree on CNBC’s ‘Halftime Report’

On CNBC’s “Halftime Report”, Virtus Partners’ Joe Terranova “completely” disagreed with George’s dovish stance and said the stock was headed for its all-time high of $55 a share in December 2006.

It’s a company that currently has $25.5 billion in excess capital; that’s 7% of its total market cap. It hasn’t even benefitted from loan growth. Net interest income is going to be double digits for the next two years. See you at $55 a share.

Even more bullish on the stock is Peter Najarian, who agreed with Terranova on “Halftime Report” and said shares could go much higher than $55 over the next year. He added:

When you look at its price to book, it’s still very inexpensive. Compare it with something like JPMorgan, Morgan Stanley, and some of those other great names, and you see how inexpensive this stock is right now.

Invest in crypto, stocks, ETFs & more in minutes with our preferred broker, eToro
68% of retail CFD accounts lose money