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

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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.

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