BofA (BAC) Shares Poised to Jump 40%?

Of all the numbers thrown around last week at Bank of America's (NYSE:BAC) day-long investment conference in New York, four metrics that are poised to improve could hold the key to the bank's recovery, and drive a 40% rally in its shares.

For openers, net charge-offs are apt to fall sharply as defaults on loans decrease. In addition, the bank's expenses as a percentage of revenue could decline, while its bloated share count could start shrinking. Not least, if interest rates rise even slightly, Bank of America could see net interest margins improve. Taken together, these developments would bode well for a company that survived the credit crisis of 2008 solely because of the generosity of Uncle Sam.

CEO Brian Moynihan is looking to consolidate operations and buy back stock, which would boost earnings per share.

Bank of America's stock rose 1.8% last week to 14.38, compared with a drop of 1.3% in the Standard & Poor's 500 and a 0.5% rise in shares of JPMorgan Chase (NYSE:JPM). BofA shares, which have underperformed other bank stocks in the past 12 months, could top 20 within two years.





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