Since the previous presidential election, banking stocks like Bank of America Corp. (BAC) have benefitted nicely. The stock is up 11.5% YTD and more than 62% over the last year. We initially recommended that readers establish buy positions in BAC last October, when the stock dropped to the $15 handle. Since then, the stock has gained on generalized economic optimism that that was ignited by the election of Donald Trump as US President. In the current context, it would be fair to argue that some of that initial ‘optimism’ was excessive given the political gridlock that most of the administration’s pro-growth policies would later face. But here we look to maintain our bullish stance as the broader macro framework supports the solid foundation in BAC’s banking businesses. Recent periods of sideways consolidation can be viewed as an opportunity to enter into new long positions or build exposure, as we see relatively few arguments which suggest that we will fail in our initial price targets to achieve a 100% gain (excluding the added dividend payouts) with BAC en route to vault the now closely-watched $30 level.

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