(BAC) Bank of America Corporation – Bear of the Day

Bank of America Corp.’s (BAC) fourth-quarter earnings came in substantially lower than the Zacks Consensus Estimate. The sale of non-core assets and accounting gains made it possible for the company to remain profitable during the quarter. However, excluding nonrecurring items, the company would have incurred a loss.

Higher non-interest expense was the primary headwind in the quarterly numbers. Also, capital and liquidity remained weak. For the full year 2011, the company reported earnings of $0.01 per share, a nickel lower than the Zacks Consensus Estimate.

Our six-month target price of $6.50 per share equates to about 7.0x our earnings estimate for 2012. This price target implies an expected negative total return of 8.1% over that period, which is consistent with our long-term Underperform recommendation on the shares.

BANK OF AMER CP (BAC): Free Stock Analysis Report

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