Bloomberg News

BofA ‘Massively Undervalued’ by Investors, Bove Says

June 27, 2011

(Updates with closing share price in third paragraph.)

June 27 (Bloomberg) -- Bank of America Corp. is being “massively undervalued” by investors, and its stock will recover as earnings outpace costs linked to troubled home loans, said Richard X. Bove, an analyst at Rochdale Securities LLC.

“Under the bleakest of scenarios Bank of America’s book value will rise in the next three years,” Bove, who is based in Lutz, Florida, wrote today in a note to clients. “At some point the market will adjust to the company’s real values.”

Bank of America, the biggest U.S. lender by assets, has slid 19 percent in New York Stock Exchange composite trading this year amid mortgage writedowns and legal costs tied to the nation’s housing slump. Shares of the Charlotte, North Carolina- based bank climbed 33 cents to $10.85 at 4:15 p.m. in New York Stock Exchange composite trading after international regulators announced planned capital requirements that eased concerns that rules would be more stringent.

“For longer-term investors willing to accept less than desirable returns near-term, Bank of America is a very, very undervalued stock,” Bove said.

--With assistance from Laura Kaster and Clyde Eltzroth in New York. Editors: David Scheer, Dan Kraut.

To contact the reporter on this story: Lindsey Rupp in New York at

To contact the editor responsible for this story: David Scheer at

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