Citi downgrades Bank of America on valuation after its nearly 40% rally since election

A pedestrian stops to use a Bank of America Corp. automated teller machine (ATM) in San Francisco, California.
David Paul Morris | Bloomberg | Getty Images

Citi Research lowered its rating for Bank of America to neutral from buy, citing the stock's full valuation and the risk of a lackluster economic recovery.

Bank of America shares surged 39 percent since the Nov. 8 election through Monday versus the 10 percent return as investors anticipated President Donald Trump's pro-growth economic agenda.

"Since the election, BAC has outperformed and has substantially closed that gap with JPM. … We believe that the benefit of higher rates, the potential post-election improvement in regulatory and economic outlook are reflected in the current valuation," analyst Keith Horowitz wrote in a note to clients Monday. "We continue to believe the group is fully valued. So, we do not see a lot left to play for."