Bank of America: shares benefit from UBS upgrade

(CercleFinance.com) - Bank of America shares were up on Tuesday morning on the New York Stock Exchange, with UBS saying it sees potential in the American bank in view of Donald Trump's forthcoming return to the White House.


Just over an hour after opening, the stock was up 1.5%, outperforming by a wide margin an S&P 500 index down by around 0.8%.

In a research note, UBS believes that the financial institution could benefit from the new Republican president's plans to deregulate the sector.

'From our point of view, Bank of America is an undervalued beneficiary of a possible easing of Basel 3 rules', stresses the research firm, which upgrades its recommendation from 'neutral' to 'buy'.

This factor could, in its view, further boost the banking group's share buy-backs, which already reach $3.5 billion per quarter.

According to UBS, share buy-backs could thus rise to $18 billion per year.

In its study, the analyst also considers that Wall Street is not taking sufficient account of the prospect of "higher rates for a long time to come" in its valuation of the stock.

Its price target has been raised from $43 to $53.

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