Wednesday, July 1, 2009

Uh-Oh: Citi Turns Bullish on B of A Stock

A few months ago, a horribly-timed market call by a Citi analyst was bearish on the financials; this marked the bottom of their bear market. Today we learn that Citi tells clients to buy Bank of America:

NEW YORK (MarketWatch) -- Macy's may not tell Gimbels, goes the old adage, but Citigroup analysts aren't shy about recommending a rival's shares: They told clients Wednesday that Bank of America's stock is the best bank buy going.
The analysts added Bank of America to their "Ten+ Aggressive Growth List," telling clients that the Charlotte, N.C.-based company /quotes/comstock/13*!bac/quotes/nls/bac (
BAC 13.07, +0.02, +0.15%) is a good long-term investment and that it should return to normalized annual earnings of $3 a share in a few years.
"We believe the firm stands to benefit long term from market-share gains across a variety of businesses, including traditional banking, mortgage origination, retail brokerage, and investment banking," Citi analysts said in a research note.
They also highlighted Bank of America's record of making acquisitions and argued that two controversial recent takeovers -- namely, Countrywide Financial and Merrill Lynch -- offer good growth opportunities for Bank of America when the mortgage and capital markets stabilize and resume their expansion.
Citi rates Bank of America's shares as a buy with an $18 price target, implying 36% potential upside from their closing price Tuesday.

Watch out below.

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