Shares of Bank of America (NYSE:BAC) held on to a 4.06 percent gain catalyzed by an upgrade from analysts at Stifel Nicolaus. The company’s rating was bumped from “Hold” to “Buy” with a price target of $11 per share, 90 cents above the stock’s 52-week high of $10.10 per share.
Fueling the upgrade is a “fortress balance sheet” aggressively pursued by chief executive Brian Moynihan. The bank has rapidly stabilized its capital position after the financial crisis and a $5 billion investment from Warren Buffet. Pending the fiscal cliff, the bank now looks ready to grow earnings per share by as much as 30 percent, according to the analysts at Stifel Nicolaus.
Catalysts are critical to discovering winning stocks. Check out our newest CHEAT SHEET stock picks now.
Morgan Stanley (NYSE:MS) is reportedly investing over $1 billion in shopping mall in Moscow. The investment suggests that Morgan Stanley thinks that Russia is a growth story and that retailers are under represented there. This is the bank’s second retail investment in the area following a $1.1 billion purchase of a mall in St. Petersburg. Shares closed up 2 percent Monday.
Citigroup (NYSE:C) will join other banks in aggressively cutting costs, and part of the process involves eliminating positions. The bank has announced that it will close as many as 300 sales and trading positions by the end of 2012. Just last year the bank cut 900 positions from its securities and banking unit. The cost cutting measures seem to be pleased investors, as shares climbed up 3.2 percent Monday.
Meanwhile, JPMorgan (NYSE:JPM) announced at the end of the week that it will settle an SEC lawsuit over mortgage-backed securities issued by Bear Stearns for $297 million. Shares closed up over 2.6 percent in Monday trading as it eases away from liability and CEO Jamie Dimon wins shareholder hearts with solid financials and share buybacks.
Good news for the financial industry comes after the Federal Reserve announced the conditions for the next round of stress tests. While only four failed in the March round — one of them being Citigroup — the industry as a whole looks safely capitalized at about twice the level it was during the crisis.
Investing Insights: Buffett’s Berkshire Hathaway Makes Some Huge Changes to Its Portfolio.