Amid continued market turmoil, BankAmerica Corp. is emerging as a company worth watching, some analysts say.
The San Francisco banking company "has significantly improved its profitability and risk profile and is well positioned in its key business areas to achieve superior financial performance," said Thomas G. Stone, banking analyst with Duff & Phelps Co.
The New York credit rating firm last week placed BankAmerica's long-term debt and commercial paper on its "Ratings Watch" with positive implications.
Separately, Credit Suisse First Boston initiated coverage of BankAmerica stock with a "hold" rating, but issued some positive comments. Bank America shares closed Friday at $75.626, up 87.5 cents for the day.
The CS First Boston recommendation, by analysts Michael Mayo and Bradley Ball, is mixed. The analysts see a lot they like at the company, including a management team that "practiced effective slicing and dicing of businesses" to boost return on equity by 4 points, to 17%.
But the banking company has been slower than some others to adopt technologies to assist retail growth and the California economy remains a wild card, the analysts said.
Future improvement in earnings "will be relatively less easy," Mr. Mayo said.
BankAmerica is among bank stocks that are likely to be very closely scrutinized as bumpy conditions mark the end of 1997 and make stock picking harder.
Analysts at Keefe, Bruyette & Woods reviewed Fleet Financial Group last week and came away impressed.
"We're seeing strength in top-line revenues, good cost controls, and continued improvement in credit quality," said Keefe Bruyette analyst Thomas Theurkauf, who reiterated a "buy" ranking. Shares of the Boston banking company ended Friday at $73.875, up 62.5 cents.
Trading in general on Friday showed continued uneasiness. Stocks rose at the opening bell, encouraged by wholesale price data that suggested continued low inflation. But gains crumbled by noon, when a big computer company, Electronics for Imaging, said it would not meet earnings projections, and tumbled $22.50, to $16.25.
"It's slightly schizophrenic out there," said Joel Silverstein, banking analyst with Prudential Securities.
Large banks showed the effects by starting strong, then waffling for the rest of the day. Chase Manhattan Corp. ended at $111.0625, up 75 cents. Citicorp fell $1.4375, to $126.8125. And J.P. Morgan, which took a hit to trading operations earlier in the week was, up $1.0625, to $117.0625, recovering some lost ground.
"Asian woes continues raising eyebrows on the Street," Mr. Silverstein said.
The Standard & Poor's bank index inched up 0.36%, and the Dow Jones industrial average was off 0.14%. The Nasdaq stock index gained 0.14%, while the S&P 500 fell 0.17%
Shares of Fidelity Bancorp were down 37.5 cents, to $23, after the Chicago banking company was caught by the continued weakening of the subprime credit market.
Fidelity reported that it would reduce projected fourth-quarter net income by $3 million because of problems with subprime auto notes. The paper, issued by troubled finance company Reliance Acceptance Group, was initially considered "temporarily impaired" but now appears to have "no readily discernible market value," Fidelity Bancorp said in a statement.
