Wall Street is usually a forward-looking sort of place, but investors may be taking it a bit far with Bank of America (NYSE: BAC ) .
While the bank does indeed have substantial scope for improving its
costs and taking advantage of higher rates, current valuations seem to
factor in almost no risk that the bank won't succeed -- a rather high
amount of faith in a company that really hasn't done a lot to earn it
yet.
Bank of America definitely has more to gain from higher rates than Citigroup, JPMorgan, Wells Fargo, or U.S. Bancorp,
but investors have to assume that they will manage to cut costs and
maintain credit discipline should they arrive. With that, JPMorgan and
Wells Fargo continue to offer more upside in a "base case" scenario, but
if everything goes right, Bank of America could continue to tick
higher.
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Is Bank of America Getting More Credit Than It Deserves?
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