Bank of America Corporation Message Board

Very Attractive Value Even Under Conservative Assumptions on Capital — We
estimate under a conservative scenario, BAC could issue up to $14 billion of
capital – this would bring our $3.50 normalized EPS estimate (see Figure 2 for
reconciliation) to $3.15 (assuming an issuance price of $14/sh). Based on
current prices and our estimates pro forma for capital raise, BAC is trading at
5x normalized EPS or a full 2-multiple-point discount to the group – despite a
scenario that that would put capital ratios well ahead of peers, remove TARP,
leave strong liquidity, and significantly less CRE exposure than peers. We
continue to see BAC as a very valuable franchise capable of generating 20%
plus ROTE. Given current prices represent a very attractive entry point (over
50% potential upside to our target) we are adding BAC to Top Picks Live.