Shares of Bank of America Corp. BAC,
rose 1.1% in premarket trading on Tuesday to an 11-month high after Citigroup analyst Keith Horowitz turned bullish, citing expectations that the bottom in the third quarter in net interest income will be greater than expected. Horowitz increased his buy rating from neutral and his stock price from $ 31 to $ 37; the stock has not closed at or above $ 37 since October 2008. He said he believes BofA is one of the biggest beneficiaries of the return of capital to shareholders (share buybacks and dividends), which should resume next quarter. “[BofA] is also being used more for consumers, who we think will perform better in this credit cycle given the incentive programs, ” Horowitz wrote. The stock is up 28.8% in the last three months to Monday, while the SPDR Financial Select Sector ETF XLF,
is up 21.6% and the S&P 500 SPX,
has won 7.5%. Horowitz also improved PNC Financial Services Group Inc. PNC,
and Bank of New York Mellon Corp. BK,
buy from neutral.