Exclusive: Here’s Why Standpoint Research Downgraded Bank of America Corp (BAC)
From August 23, 2010, top analyst Ronnie Moas at Standpoint Research has advocated confidence in Bank of America Corp (NYSE:BAC). Furthermore, ever since the analyst first recommended a Buy on the banking giant’s stock, shares surged forward over 80%, with a big half-chunk of that pay-off materializing from October 1st onward.
Yet, the bullish party appears to be over for the giant from Moas’ eyes, as he markedly steps to the sidelines and downgrades BAC from a Buy to a Hold rating without listing a price target.
Moas cautions with his two cents of forewarning against the company that once was the apple of his eye, indicating, “Many individuals have jumped on BAC recently after seeing many hedge funds piling into this on the Q3 13F reports that were made public a couple of weeks ago — and that may be a mistake. The 13F numbers that came out on November 15 reflect trades that were made in calendar Q3 and those institutions who went in (in Q3) may now be locking in 40% gains. So, we have a situation where hedge funds may be selling shares to individuals who are piggy-backing off of trades that well-known hedge fund managers made two months ago!”
Therefore, “Bank of America has jumped by 40% since the end of Q3 — and more than half of that gain has come since the election. This was a $13 stock just five months ago. I still see value in this name but it is now trading at 11 times my EPS estimate for 2018 and 15 times my estimate for 2016. I can no longer leave my highest recommendation attached to this name given the recent absolute and relative move,” Moas concludes.
Ronnie Moas has a very good TipRanks score with a 71% success rate and he stands at #36 out of 4,239 analysts. Moas realizes 5.6% in his annual returns. However, when suggesting BAC, Moas loses 38.6% in average profits on the stock.
TipRanks analytics exhibit BAC as a Buy. Out of 19 analysts polled in the last 3 months by TipRanks, 12 are bullish on Bank of America stock while 7 remain sidelined. With a loss potential of nearly 14%, the stock’s consensus target price stands at $18.53.