By Colin Barr
January 13, 2011

Sometimes you just have to cut your losses.

So it is with Citi analyst Keith Horowitz. He removed Bank of America (BAC) from his Top Picks Live list Thursday, noting that a 37% rally in the stock over the past six weeks brings it near $15 — just $3 short of his target price.

Horowitz still rates the stock buy, saying it’s the best value among banks, but he stripped its top-pick status because it could be hit by “ongoing noise from mortgage repurchase issues and our view that EPS estimates for 2011 are too high.”

Of course, the same might have been said of Horowitz’s expectations for BofA stock. He has rated the stock buy since October 2008, when it traded in the mid-20s in the wake of its meltdown-eve purchase of Merrill Lynch.

He bravely maintained that rating through the depths of 2009, as the stock declined as low as $3 amid fears the bank would be taken over by the government – a concern he dealt with by tabbing BofA for four months with a “buy-speculative” rating.

Since then, he has consistently rated the stock a high-risk buy — though he has changed his price target eight times, ranging between the current $18 and $26. The stock briefly rose above $18 this spring but hasn’t approached $26 since the financial meltdown.

If that’s not exactly inspiring, consider BofA’s brief, unhappy life on the top picks list. Horowitz put it there in October 2009 after the stock tumbled on concern the bank would have to sell more stock to repay government bailout loans.

“Fear of a capital raise only adds to the uncertainty hitting the stock, which creates a very attractive entry point,” he wrote then.

But as the chart at right shows, that entry point didn’t end up being all that attractive for those who bought the stock then and held on. BofA shares are actually slightly below their level the morning of the recommendation, thanks in part to worries about how hard new rules and mortgage disputes will hit earnings.

Horowitz is refreshingly candid on that point, though. “This was not our best call,” he admits.

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