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Bank of America Shares Lowered to 'Hold' (*** out of *****) from 'Buy,'
FleetBoston Maintained at 'Hold' (*** out of ****) by S&P Equity Research
NEW YORK, Oct. 27 /PRNewswire/ -- Standard & Poor's banks equity analyst
downgraded the STARS ranking on shares of Bank of America to "Hold" (*** out of
*****) from "Buy" (***** out of *****) at $73.80 per share, and maintained the
STARS ranking on FleetBoston Financial of "Hold" (*** out of *****) at $39.35
per share. A leading provider of independent investment research, ratings and
indices, Standard & Poor's made this announcement through Standard & Poor's
MarketScope, its real-time market intelligence service.
"We are downgrading our opinion on Bank of America to "Hold" as it agrees to
merge with FleetBoston Financial," says Mark Morgan, Banks Analyst, Standard &
Poor's Equity Research Services. "The planned deal is expected to close in the
second quarter of 2004, pending necessary approvals. We are concerned about the
premium paid for FleetBoston (the deal is expected to be worth about $45 per
FleetBoston share), a company we think has low earnings visibility, a volatile
earnings history, and ongoing credit quality issues. We are cutting Bank of
America's 2004 estimate to $7.00 from $7.25 to reflect the expected earnings
dilution. We think integration challenges raise risk for Bank of America stock.
We are also lowering our 12-month target price on Bank of America's shares to
$80 from $95, based on a price/earnings ratio of 11.5 times our 2004 estimate,"
concludes Morgan.
About Standard & Poor's STock Appreciation Ranking System (STARS)
Standard & Poor's Stock Appreciation Ranking System (STARS), which was first
introduced on December 31, 1986, reflects the opinions of Standard & Poor's
equity analysts on the price appreciation potential of 1,200 U.S. stocks for the
next 12 month period. Rankings range from five-STARS ("Buy") to one-STARS
("Sell").
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The analyst quoted above is a Standard & Poor's equity analyst. He has no
affiliation with any company referenced above. He has no ownership interest in
any company referenced above. Standard & Poor's other affiliates may provide
services to the companies that are the subject of this report. Standard & Poor's
analytic services are performed as entirely separate activities in order to
preserve the independence of each analytic process. In this regard, STARS,
which are published by Standard & Poor's Equity Research Services, operates
independently from, and has no access to information obtained by Standard &
Poor's Ratings Services, which may in the course of its operations obtain access
to confidential information.
Standard & Poor's analytic services are performed as entirely separate
activities in order to preserve the independence of each analytic process. In
this regard, STARS, which are published by Standard & Poor's Equity Research
Services, operates independently from, and has no access to information obtained
by Standard & Poor's Rating Services, which may in the course of its operations
obtain access to confidential information.
DATASOURCE: Standard & Poor's
CONTACT: John J. Piecuch
Communications Manager
(+1) 212-438-1102
Web site: http://www.standardandpoors.com/