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Pro Analysis

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
A pedestrian stops to use a Bank of America Corp. automated teller machine (ATM) in San Francisco, California.

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 S&P 500's 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."