Shares of Bank of America Corp. gained 0.4% in premarket trading Tuesday, after a bullish call from BMO Capital analyst James Fotheringham, who said Street expectations and valuations "look too low." Fotheringham raised his rating to outperform, after being at market perform for at least the past three years, while keeping his price target at $37, which is 33% above Monday's stock closing price of $27.93. Fotheringham said about one-third of the potential upside to his price target is based on expected upward revisions of consensus earnings expectations, on the back of higher fees and share repurchases and lower tax rates. The remaining two-thirds of the potential gain is from an expected "rerating" of price-to-earnings valuations, given that the stock is currently trading at a 15% discount to average valuations that have historically been seen during benign economic conditions. He said even if the Federal Reserve lowers interest rates, an increase in consensus earnings expectations should more than offset any dilution to net interest margin. The FactSet 2019 EPS consensus of $2.85 is down from $2.90 at the end of March, but is up from $2.61 a year ago. The stock has lost 6.3% over the past three months, while the SPDR Financial Select Sector ETF has edged up 0.3% and the Dow Jones Industrial Average has gained 2.0%.