Several bullish analyst recommendations on Bank of America Corp. lifted bank stocks across the board Monday.
The KBW Bank Index rose 7.53%, after Goldman Sachs analysts upgraded B of A's stock, recommending that investors buy the Charlotte, N.C. company's shares. Anthony Polini, an analyst with Raymond James & Associates, also "strongly recommended" B of A as well as the shares of Wells Fargo & Co., due to better-than expected stress test results and the companies' very low price-to earnings ratios on core earnings-per-share power.
"We believe these stocks can double in price over the next 12-18 months if the U.S. enters a modest recovery by early next year," he wrote. B of A's shares rose 9.9% and Wells rose 8.3%.
Citigroup Inc. analyst Keith Horowitz, meanwhile, wrote that he believes the $2.3 trillion-asset Charlotte company has sold 250 million to 300 million shares of common stock since May 8, based on trading volume and share prices. Horowitz, who gives B of A a "buy" rating, wrote that such sales may have raised $3 billion to $4 billion of capital. Bank of America has been selling stock as part of plans to raise $33.9 billion to satisfy requirements of the Treasury Department's stress test.