Morgan Stanley (NYSE: MS) Says Bank of America (NYSE: BAC) Stock Price to Increase

Morgan Stanley (NYSE: MS) wrote in a note to clients on Tuesday that they believe Bank of America‘s (NYSE: BAC) share price will increase during the next 45 days, citing a number of catalysts which could drive gains in the company’s stock price.

Analysts at Morgan Stanley believes that Bank of America’s April 16th earnings release will be surprise investors to the upside. Morgan Stanley places Bank of America’s earnings per share prediction at $0.23 per share, compared to the consensus estimate of $0.09.

MS believes that Bank of America’s earnings beat will be driven by the consolidation of the company’s card portfolio, which will lift net interest income. If the earnings surprise unfolds as predicted, analysts would be forced to re-rate Bank of America’s stock price to account for the consolidated card portfolio and higher income, which may push the company’s stock price higher after the earnings report

Finally,  Morgan Stanley cites the “capture of two more months of declining card master trust credit losses” as a reason for an improved BAC stock price. If Bank of America’s credit outlook improves, the news would likely be well received by Wall Street.

Morgan Stanley has an “overweight” rating on the stock.

The analyst wrote that “there is about a 70% to 80% or ‘very likely’ probability for the scenario.”