Bank of America Corp (NYSE:BAC) was upgraded this morning to a “Buy” rating by Goldman Sachs, which has sent the stock’s price jumping just under 2% in morning trading today. Speaking in a Stop Trading segment on CNBC this morning, veteran analyst Jim Cramer agreed with the upgrade and thinks Bank of America Corp (NYSE:BAC) has put the majority of their troubles behind them and can now get back to the business of banking.
“Well here’s something I’ve been waiting to hear: Goldman Sachs goes “hold’ to “buy”, Bank of America. Why? Because they’ve settled a lot of problems. I was quite surprised when Bank of America settled with the government that the stock didn’t immediately go up,” Cramer said.
As he mentioned, there are still some lingering concerns over the low interest rates stifling margins, which is not eliciting much excitement for the stock amongst investors. Still, Cramer sees the fact that Bank of America Corp (NYSE:BAC) CEO Brian Moynihan can now put his focus back on banking as a major positive, after years of litigation and regulatory concerns overshadowed operations. Those are now largely resolved.
Despite being unheralded, Bank of America Corp (NYSE:BAC) did report much stronger than expected revenue and earnings last quarter, with $21.96 billion in revenue and $0.41 earnings per share, which drubbed the market consensus of $0.30 earnings per share. They are expected to generate similar earnings per share in the current quarter. Bank of America Corp (NYSE:BAC) also announced a quarterly dividend of $0.05 per share, up from the previous quarter’s dividend of just $0.01 per share.
JP Morgan reiterated an “overweight” rating on the stock last week, while Nomura Securities downgraded Bank of America Corp (NYSE:BAC) from “buy” to “neutral”, showing some of the uncertainty still over Bank of America’s potential growth. The two firms have price targets of $17.50 and $17.00 respectively for the stock, which oepned today at $16.02. Goldman Sachs has given them a 12-month price target of $19.00.