Countrywide Financial (NYSE:CFC) has been in the news more in the past two weeks than it has in the past two months. The CEO, Angelo Mozilo, has been on the television business shows expressing concern over subprime loans and their possible implications, and announcing that CFC is pulling back from the subprime business. The reality, however, may be better than the hype.

Then along comes Merrill Lynch. The senior analyst at Merrill, Kenneth Bruce, upgraded his recommendation of Countrywide Financial and reiterated his price target of $50. The shares closed at $34.39 yesterday. If Bruce is correct, there is a nearly 50% upside in price movement. He cites the underlying strength of Countrywide's balance sheet, which would allow them to weather any potential storm.

Street estimates for Countrywide Financial are $4.38 earnings per share for 2007 and $4.98 earnings per share for 2008.

Of course, there looms the potential of Bank of America (NYSE: BAC) waiting to add Countrywide to its own portfolio. Stay tuned . . .

Georges Yared is the author of Stop Losing Money Today and Baby Boomer Investing. Please visit www.georgesyared.com