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Bank of America Corporation Message Board

  • optiontrader99 optiontrader99 Nov 5, 2009 9:28 AM Flag

    Stop Trading - Buy "BAC"

    Very Attractive Value Even Under Conservative Assumptions on Capital โ€” We
    estimate under a conservative scenario, BAC could issue up to $14 billion of
    capital โ€“ 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 โ€“ 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.

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