TTM - Bank of America cut to Peer Perform at Wolfe as valuation gets ahead of itself

Wolfe Research analyst Steven Chubak downgrades Bank of America (NYSE:BAC) to Peer Perform from Outperform, citing valuation and fee income. "For valuation, even when layering in higher rates (+100bps), shares screen rich relative to other rate sensitive peers" including Morgan Stanley (NYSE:MS), Raymond James Financial (NYSE:RJF), LPL Financial (NASDAQ:LPLA),  and Northern Trust (NASDAQ:NTRS), Chubak writes. Consensus fee income forecasts appear to be "too aggressive with the Street crediting tax gains from ESG/other investments without reflecting associated fee income drag," he adds. Even with the downgrade, Bank of America (BAC) shares rise 1.0% in premarket trading. The Peer Perform rating agrees with the Neutral Quant rating and contrasts with the average Wall Street rating of Bullish (10 Very Bullish, 7 Bullish, 7 Neutral, 1 Bearish, 1 Very Bearish). On price/sales (trailing twelve months), Bofa's (BAC) multiple exceeds those of MS, LPLA, RJF, and NTRS as seen in the table below. SA contributor Envision Research

For further details see:

Bank of America cut to Peer Perform at Wolfe as valuation gets ahead of itself