Paulson & Co., the hedge fund firm run by billionaire John Paulson, told investors Bank of America Corp.'s stock will almost double in the next two years as writedowns ease.

B of A may rise to $29.81 by December 2011, Paulson said in a quarterly letter to clients. It closed Wednesday at $16.35, up 3.68%.

"Banks will have passed the current writedown cycle and have visibility for growth in 2012," the letter said. B of A dropped to $2.53 in February amid concern that the U.S. might seize banks that ran short on capital. While the bank "has risen from when we purchased the stock, we believe considerable upside remains," the letter said.

The Charlotte bank represents Paulson's biggest holding among financial companies, the letter said. Earlier this month, he disclosed a stake in Citigroup Inc.

The firm's target price is higher than most securities firms are predicting. Among analysts surveyed,, 21 rated Bank of America "buy," one said "sell" and nine said "hold," with an average price target of $20.82.

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