Analyst Upgrades BAC Stock, Targets 32% Upside

The brokerage firm thinks valuation and consensus estimates "look too low"

Bank of America Corp (NYSE:BAC) stock is up 0.1% at $27.83, after BMO upgraded the financial stock to "outperform" from "market perform," saying valuations and consensus estimates "look too low." The brokerage firm maintained its $37 price target, which represents a 32.4% premium to last night's close.

Heading into today, analyst sentiment toward BAC stock was mixed, with eight brokerages maintaining a "buy" or better rating, compared to eight tepid "holds." However, the average 12-month price target of $33.37 is a nearly 20% premium to current trading levels.

In the options pits, meanwhile, Bank of America stock's 10-day put/call volume ratio of 0.45 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks in the 91st annual percentile. So, while calls have outpaced puts on an absolute basis, the rate of put buying relative to call buying has been accelerated.

Looking at BAC's chart, the bank stock rallied off its late-December lows alongside the broader equities market, finding its way to a seven-month high of $31.17 by April 29. Any pullbacks in 2019 have found a floor in the $26.50-$27.00 neighborhood, home to the equity's pre-bull gap levels from mid-January, with Bank of America shares currently boasting a 13.5% year-to-date lead.