Sarat Sethi Disagrees With Bank Of America Downgrade By Baird

If the lending business picks up, Bank Of America Corp (NYSE: BAC) is one of the best banks to own, Douglas C. Lane & Associates' Sarat Sethi said Tuesday on CNBC's "Fast Money: Halftime Report"

What Happened: Baird analyst David George downgraded Bank of America from Outperform to Neutral and announced a $42 price target on Tuesday.

"I disagree with this call. It's one of my top holdings," Sethi said. If interest rates begin to rise, the stock will be positively impacted in numerous ways, he said.

Recent Earnings Report: Bank Of America reported first-quarter financial results on April 15. The company reported earnings of 86 cents per share, beating the estimate of 66 cents and revenue of $22.93 billion, beating the estimate of $22.13 billion. Bank of America also announced its board of directors authorized the repurchase of up to $25 billion of common stock.

The stock has had a nice run this year, but Sethi thinks there is a lot more room to run, he told CNBC, adding that if the stock goes down further, the company has enough excess capital to buy back more shares. 

Price Action: Bank Of America traded as high as $41.13 and as low as $20.10 over a 52-week period. The stock was up 1.08% at $41 at last check Tuesday afternoon. 

See also: Buy Bank of America (BAC) Stock

(Photo by Mike Mozart from Flickr)