Bank of America: Ignore the $114 Billion "Unrealized Losses"
(Preview) Company Update (BAC US) (Buy)
Summary
Bank of America stock is down 30% from a year ago, at just 1.3x Tangible Book Value and a P/E of around 9x.
The market is fearful about banks and $620bn of "unrealized losses" in their bond portfolios, with Bank of America seen as most at risk.
These fears largely stem from a misunderstanding of accounting rules, and a new Fed support program has removed most of the risks.
Bank of America has always been able to retain plentiful cheap deposits, and large banks are benefiting from the current crisis.
With shares at $28.73, our forecasts indicate investors may double their money by2025 year-end. The Dividend Yield is 3.1%. Buy
Introduction
Bank of America stock is just above its 52-week low, down 30% from a year ago:
Bank of America Share Price (Last 1 Year)
The market has become fearful about U.S. banks. Some commentators have pointed to $620bn of “unrealized losses” in their bond portfolios, with BAC supposedly among the most vulnerable with $114bn su…