I know some may think I'm some sort of loony tune, or might suspect I make outrageous claims just to attract attention. Quite the contrary: I do serious analytical work, and I take my reputation as an analyst very seriously.

Why do I bring this up? In February, when Bank of America (BAC) was below $4, I wrote a report  in which I presented a model showing that Bank of America was probably worth at least $30. I was called everything from ignorant to a stooge of the government.

On May 8, in an article entitled The Crisis is Over -- For Now, I shared the fact that I'd updated my model and believed that, based on SCAP assumptions, Bank of America was worth $40. People scoffed again.

I was therefore particularly pleased to read today's very in-depth report by Morgan Stanley’s (MS) bank analyst Betsy Graseck. I came to the report by chance; I'd read that she increased her second-quarter earnings estimates this morning, and I was curious to see what Ms. Graseck has been thinking lately. I consider her to be probably the best bank analyst on Wall Street. Nobody's more thorough, technically competent, and more analytically sound in terms of modeling and valuation methodology than she.

Ms. Grasek and I don't know each other. However, she's arrived at 2010-2013 earnings estimates that are very similar to my own. According to Ms. Graseck’s estimates, Bank of America is trading at 3.5 times 2011 EPS, 2.8 times 2012 EPS, and 2.4 times 2013 EPS. Additionally, the company is trading at 0.8 times Tangible Book Value -- which is absurd for a franchise that will be producing a tangible ROE of over 20% by 2011. 

Her price target for Bank of America: $32. I find this extraordinary, since we all know that Wall Street analysts are under a great deal of pressure not to issue price targets too far ahead of the market. But Bank of America is Ms. Graseck’s top pick. And -- based on extensive conversations with the heads of every major division at Bank of America (which she summarizes in detail in her report) -- Ms. Graseck increased her 2009 EPS estimate for the company by about 20%.

With respect to Bank of America, it looks like I now have somebody to take ursine derision with.