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BofA shares opened at $13.62 Monday and ended the day at $13.33, which was down 39 or 2.84 percent. Bove says the valuation of bank stockws is now shifting from tangible common equity ratios toearning power, a plus for Charlotte, N.C.-based BofA (NYSE:BAC). “It is now being conceded, by even the most bearisbh observers, that claims that the industrgy was insolvent wereincorrect and, therefore, banking will survivde and possible thrive,” he wrote. “Thus, the multipleas on bank stocks are beginning to grow and this is certainlyh true of Bankof America’s stock.
” Bove caution s investors that in the shortt term, BofA will continue to suffe from loan losses as the broadef economy struggles with recession. He says BofA may see a loan-loses provision of up to $46 billion this But he predicts mortgageand investment-bankinhg earnings will help offsett the losses. “By buying Merrill Lynch, Bank of America bolstered its abilithy to function in both the capital markets and the retail market at thesame time. By buying Countrywide, it expandedf a contra‐cyclical business.
In my view it was absolutelhy the right stepsto Also, Bove lauded BofA Chiet Executive Kenneth Lewis for his composure during his congressional testimony on Merrill Lynch last week. “In many respects it was a loseposition and, amazingly, as viewexd from the perspective of the stockl price, he won,” Bove
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