UPDATE 1-UBS cuts Bank of America to neutral
(Changes source; adds details, share movement)
Aug 8 (Reuters) - UBS said it downgraded Bank of America Corp (BAC.N) to "neutral" from "buy," as it sees limited near-term upside for the stock, following a recent rally and tough macroeconomic backdrop.
Analyst Matthew O'Connor said although Bank of America's liquidity position was among the strongest in the industry, spill over of macro issues could increasingly pressure its credit.
O'Connor also said he does not expect a large capital raise or dividend cut at the bank.
He, however, expects slightly higher credit card losses at about 7 percent to 8 percent for the bank, compared with expectations of 6 percent to 6.5 percent.
The brokerage's U.S. securitized products research group believes industry-wide card losses could approach 12 percent, compared with 6.5 percent currently, if the downward spiral in housing continues.
O'Connor raised his price target on the stock to $31.00 from $29.50.
Shares of Bank of America were up nearly 2 percent at $32.00 in afternoon trade on the New York Stock Exchange. They have risen 72 percent since their recent lows of $18.44 in July. (Reporting by Bijoy Koyitty in Bangalore; Editing by Anil D'Silva)
