Keefe Bruyette & Woods late Monday upgraded Bank of New York Co. to "attractive" from "hold" as the bank's shares continued a descent that began two months ago.

David Berry, a research director at Keefe, said the bank's slide to below $48.25, from $54.625 on Feb. 12, has made it "a lot more attractive."

Mr. Berry had downgraded the bank to "hold" from "attractive" on Jan. 30, when the stock reached $50.875. By Feb. 12, the share price peaked to $54.625.

Last week, however, the stock slipped below the $50 mark. On Tuesday, the bank's shares fell 25 cents to $47 on a generally weak day for bank stocks.

Mr. Berry said his earnings projections have not changed. "It is one of the better managed companies in America," he said, adding that his 12-month price target on the stock is $55.

Analysts attributed the decline in Bank of New York's stock price to recent acquisitions, which include a factoring business from MidAtlantic Bank and a trust servicing unit from Investors' Fiduciary Trust Co., a subsidiary of State Street Boston Corp.

The first-quarter acquisitions and an aggressive stock buyback in the fourth quarter caused a slip in the bank's net interest margins, said Dennis Shea, an analyst from Morgan Stanley & Co.

Mr. Shea, who has consistently rated the stock a "buy" since 1991, added that a $300 million drop in noninterest bearing deposits in the quarter - to $9.55 billion - also contributed to the soft margin.

"But the bears are examining the trees and forgetting the forest," said Mr. Shea. "The processing businesses are high-growth, high-return, and high-multiple endeavors."

Bank of New York's price-to-earnings multiple - just under 10 - has lagged considerably behind such peers as State Street Boston Corp. and Northern Trust Co., fee-reliant banks trading at 12 to 13 times earnings, Mr. Shea said.

Based on its fee-processing business, Mr. Shea argued that Bank of New York is headed for a high-growth period. Between 1995 and 1996, fee revenues associated with acquisitions increased $75 million, while expenses rose just $28 million.

"The key is that they are gaining share in all their businesses," Mr. Shea said. "No one can process cheaper than them."

Mr. Shea compared Bank of New York's current position to State Street's 20 years ago. Between 1975 and 1979, State Street had the lowest valuation among the 55 banks he surveyed. Because of fee processing, it has become one the "best valuated banks " in the country, he said.

State Street Boston Corp. fell $.625 cents, down to $46. Northern Trust Co. rose $1.625 to $54.375.

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