Zacks Investment Research downgraded shares of Bank of America Corporation (BAC) from NEUTRAL to UNDERPERFORM on February 26, 2015, with a target price of $15.00.
We are downgrading our recommendation on Bank of America to Underperform reflecting persistent pressure on net interest yield leading to overall strain on top line growth. However, the company's fourth-quarter 2014 adjusted earnings marginally beat the Zacks Consensus Estimate driven by a well-controlled expense line, partially offset by higher provision for credit losses and lower revenues (owing to lower mortgage banking income and trading income). We expect initiatives like balance-sheet restructuring, expense-reduction, improving asset quality, strong capital ratios and branch consolidation to bolster the company's growth prospects. Nevertheless, prevailing low-rate environment and various regulatory and litigation issues will likely keep hurting the company's performance in the near term.
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