Zacks Investment Research upgraded shares of Bank of America Corporation (BAC) from UNDERPERFORM to NEUTRAL on August 22, 2014, with a target price of $17.00.
We are upgrading our recommendation on Bank of America to Neutral due to its long-due mortgage settlement, recent dividend hike and better-than-expected second-quarter 2014 adjusted earnings. Results (before considering litigation expenses) were driven by better-than-expected top-line growth, lower provision for loan losses and prudent expense control. However, lower mortgage banking income and equity investment income were the downsides. We expect measures like balance sheet restructuring, expense-reduction and branch consolidation to bolster the company's growth prospects. Nevertheless, persistent pressure on the top line, prevailing low-rate environment and various regulatory and litigation issues will continue to impact its near-term performance.
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