Why These Investors Disagree With Bank of America Downgrade, See Significant Upside

Bank Of America Corp BAC was featured as the call of the day Monday on CNBC's "Fast Money Halftime Report."

What Happened: Baird analyst David George downgraded Bank of America from a Neutral to an Underperform rating and announced a $42 price target. He cited an unattractive risk-reward ratio as a result of elevated expectations.

Related Link: Why This Bank Of America Analyst Is Turning Bearish

Terranova's Take: Virtus Investment Partners' Joe Terranova strongly disagreed with the downgrade. He expects the stock to make new all-time highs above the $55 level over the course of the next year.

"I completely disagree. See you at $55," Terranova said.

Bank Of America currently has $25.5 billion of excess capital, representing 7% of the company's market cap, according to Terranova. The stock is yet to benefit from loan growth, he said, adding that net interest income is expected to be in double-digits over the next two years.

Najarian's Take: Market Rebellion co-founder Pete Najarian also voiced his disagreement with the downgrade.

"When you look at it on a valuation basis ... it's still very inexpensive," Najarian said.

He noted that he has owned Bank Of America stock for almost a decade and plans to continue to hold the stock.

"I think there's plenty of room to the upside. I don't think it's just $55 Joe, I think this thing is going much higher than that over the next year," Najarian said.

BAC Price Action: Bank Of America has traded as high as $48.42 and as low as $23.12 over a 52-week period.

The stock was down 0.26% at $47.66 at time of publication.

Photo: Mike Mozart from Flickr.