(Corrects to show projected dividend rate is annual in the second paragraph.)
Nov. 8 (Bloomberg) -- Bank of America Corp.’s stock could almost double in three years as capital improves, operating costs decline and mortgage risks ease, according to Ed Najarian, banking analyst at ISI Group.
Najarian changed his rating to buy from hold, saying in a note to investors yesterday that Bank of America may be able to buy back common shares sooner and in greater amounts than he expected. The dividend, now 4 cents a share annually, could jump to an annual 20 cents next year and 40 cents by 2015, ISI wrote.
The stock buyback could amount to 11 percent of common shares over the next three years, “and that outlook could easily prove too conservative,” Najarian wrote.
Bank of America is ranked second by assets among U.S. lenders and is based in Charlotte, North Carolina. The stock closed at $9.23 yesterday, leading the Dow Jones Industrial Average (INDU) this year with a 66 percent gain. Najarian forecast the stock could reach $12 a year from now and $18 by the end of 2015.
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