Bank of America

Andrew Bary A sharp rise in rates since the end of the third quarter widened losses on bank securities portfolio and could become an investor issue again when banks start reporting their fourth-quarter results in the next week. Bank of America has the largest unrealized losses in the banking industry and could be a focus of investor attention. Barron’s estimates that Bank of America’s paper losses on a portfolio of $568 billion of bonds, mostly U.S. agency mortgage securities, could widen to $111 billion or more, compared with $86 billion at the end of September. Industrywide, total unrealized losses could top $500 billion, up from $364 billion at the end of the third quarter. These losses involve all banks insured by the FDIC. The total potential losses would still be narrower than the nearly $700 billion at banks at the end of the third quarter of 2022. Why the wider […]

Bank of America’s (BAC) first-quarter top- and bottom-line results fell year over year amid a drop in net interest income, which the bank said will likely hit a trough in the current quarter before rebounding later this year. Revenue, expressed as the sum of net interest and noninterest income, dipped to $25.82 billion for the three months ended March 31 from $26.26 billion a year ago but topped the $25.39 billion average analyst estimate on Capital IQ. GAAP earnings per share dipped to $0.76 from $0.94 and missed the Street’s view by a penny. Net interest income, or NII, was $14.03 billion, down from $14.45 billion a year ago. Sequentially, NII rose from $13.95 billion amid benefits of higher-yielding assets and an improvement in global markets NII, Chief Financial Officer Alastair Borthwick told analysts on a conference call, according to a Capital IQ transcript. “Good deposit growth provided a strong

CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows: This was not BAC’s best quarter with flat growth Y/Y in net interest income (NII), total loans, and total deposits, but investment banking and wealth management were better. We raise our target by $3 to 38 on a forward P/E of 11.7x, near the three-year historic average at 11.5x. We lower our ’24 EPS view by $0.05 to $3.25 and keep ’25’s unchanged at $3.40. BAC posted Q1 EPS of $0.76, $0.01 below consensus. Our revenue forecast is $100.5B in ’24 and $103.2B in ’25. In Q1, noninterest expense was 6% Y/Y higher with compensation expense up 3%, despite a 1.7% decline in total net revenue. Consumer revenue was -5% Y/Y with flat credit card income. In Global Banking, investment banking fees were +27% Y/Y, business lending

The following is a summary of the Bank of America (BAC) Q1 2024 Earnings Call Transcript: Financial Performance: Bank of America reported net income of $6.7 billion and earnings per share of $0.76 for Q1, rising to $7.2 billion and $0.83 after excluding the additional FDIC assessment. Net interest income exceeded guidance at $14.2 billion. Deposits grew by over $20 billion quarter-end. Nearly $1.6 billion was reported in investment banking fees, a 35% increase from Q1 2023. Investment and brokerage services revenue increased 11% to nearly $3.6 billion year-over-year. The bank returned $4.4 billion to shareholders by way of dividends and share repurchases. The bank reported a return on average assets of 83 basis points and a return on tangible common equity of 12.7%. The bank ended the quarter with total assets of $3.27 trillion, up $94 billion from the previous quarter due to increased global market activity. The bank

UBS analyst Erika Najarian downgrades Bank of America (NYSE:BAC) from Buy to Neutral and raises the price target from $39 to $40.

Bank of America (BAC) could have limited upside given a combination of macroeconomic factors, UBS Securities said in a note emailed Thursday. UBS considers the bank’s stock to be at fair value following adjustments to account for three Federal Reserve rate cuts in 2024 and four cuts in 2025. The company has a positive momentum going with strong deposit growth, increase in investment banking and markets activity, and potential buybacks, especially in the second half. With Bank of America’s stock in the high $30s, trading at 12x its estimated 2024 EPS and 11.5x its estimated 2025 EPS, and $4 EPS unlikely until 2026, assuming there’s no recession, “this is now fairly reflected in market multiples,” UBS said. However, the conundrum is that if the Fed cuts rates, the bank will have to lower EPS estimates, and if the Fed keeps rates high, Bank of America could make more money, but

Citigroup analyst Keith Horowitz maintains Bank of America with a Neutral and raises the price target from $37 to $39.

By Alexander Saeedy Bank of America CEO Brian Moynihan believes the banking industry will employ fewer people over time as machine learning and artificial intelligence take over how banks process payments and manage client finances. Even though Bank of America shrank its retail business staff from around 100,000 employees to 60,000 over the last decade, Moynihan said that consumer deposits have grown by some $500 billion. The volume of transactions processed through the bank is also “lightyears bigger, he said. Were basically running on a neutral headcount, Moynihan said in an interview on Bloomberg TV. The expense base we run the whole company on today, around $64 billion, is about the same as it was in 2015. While human workers will likely contribute less and less to each new dollar of revenue, Moynihan said the remaining employees will be paid a lot more than previous generations since they will be

Oppenheimer analyst Chris Kotowski maintains Bank of America (NYSE:BAC) with a Outperform and lowers the price target from $50 to $46.

Bank of America (NYSE:BAC) Stock Analyst Ratings Date Upside/Downside Analyst Firm Price Target Change Rating Change Previous / Current Rating 01/30/2024 21.16% Morgan Stanley $32 → $41 Upgrades Equal-Weight → Overweight 01/16/2024 0.18% Odeon Capital → $33.9 Downgrades Buy → Hold 01/16/2024 44.8% Oppenheimer $50 → $49 Maintains Outperform 01/16/2024 6.38% BMO Capital $37 → $36 Maintains Market Perform 01/02/2024 27.07% Barclays $39 → $43 Maintains Overweight 12/14/2023 12.12% Odeon Capital → $37.94 Upgrades Hold → Buy 12/01/2023 -2.48% Goldman Sachs $30 → $33 Maintains Buy 11/16/2023 50.71% Oppenheimer $49 → $51 Maintains Outperform 11/06/2023 -11.35% Keefe, Bruyette & Woods $29 → $30 Upgrades Underperform → Market Perform 10/18/2023 44.8% Oppenheimer $48 → $49 Maintains Outperform 10/18/2023 18.2% BMO Capital $39 → $40 Maintains Market Perform 10/03/2023 -5.44% Morgan Stanley $34 → $32 Maintains Equal-Weight 09/26/2023 41.84% Oppenheimer $49 → $48 Maintains Outperform 09/15/2023 -18.74% Piper Sandler $28 → $27.5

Morgan Stanley analyst Betsy Graseck upgrades Bank of America (NYSE:BAC) from Equal-Weight to Overweight and raises the price target from $32 to $41.