Bank of America: shares benefit from UBS upgrade

(CercleFinance.com) - Bank of America shares closed up 1.
5% on Tuesday on the New York Stock Exchange, with UBS saying it sees potential in the US bank in view of Donald Trump's forthcoming return to the White House.

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, it says, which upgrades its rating on the stock from 'neutral' to 'buy'.

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

According to UBS, share buy-backs could thus rise to $18bn 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 target price has been raised from $43 to $53.


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