Bank of America 's high valuation has little room for upside, Citi warned. Analyst Keith Horowitz downgraded the bank stock to neutral from buy while reiterating his price target at $40, which presents an upside of just 4.1% from Friday's close. "BAC is a high quality franchise that is executing well and may be a good defensive holding in light of upcoming economic and market uncertainty given BAC's good deposit franchise and lower credit risk," he said. "While we believe the stock can do well on a relative basis in the event of a pullback, we don't see much upside on an absolute basis as the stock is currently trading below the average on our implied cost of equity metric, reflecting a premium valuation and leaving little room for multiple expansion." Horowitz said the risk is "skewed to the downside" in 2023 for Bank of America when it comes to net interest income, which looks at difference between the revenue from the bank's interest-bearing assets and liabilities. He cited a "more conservative view" on deposits going forward and added that net interest income tailwinds "seem fully factored in" for the banking giant. "Bottom line, we see the risk skewed to the downside to [net interest income] consensus estimates for 2023 for BAC vs. in the past where stock was driven by positive NII revisions driven by lower premium am (played out now), a less rate sensitive deposit base, and the impact of forward swaps on [available for sale] portfolio in 4Q22," Horowitz said. The analyst lowered his full-year 2023 earnings per share estimate by 10 cents to $3.65. He also trimmed his 2024 earnings per share estimate by 5 cents to $4.40. Meanwhile, Horowitz said the risk of customers not being able to pay credit cards may provide a smaller hit than originally feared, though it's still too early to call and a "wildcard." He also said regional banks may be better positioned and that increased requirements for capital may hurt returns in that area. Other comprehensive income may also be lower, though the bank won't benefit as much because it hedged elsewhere, he said. He said this outlook and his expectation for the stock's future performance could be impacted by interest rate hikes or changes to risk levels for credit. Bank of America is down 13.7% this year. That means it's performing worse than the financial sector of the S & P 500, which has lost 8.4%. — CNBC's Michael Bloom contributed to this report.