Oppenheimer modestly reduced its estimates for Bank of America for both the fourth quarter of 2014 and the full year 2015. The biggest driver of earnings per share reduction comes from the assumption that trading revenues will be down across all major banks.
Oppenheimer predicted that trading revenues are once again likely to be down on the order of 10% year-over-year, making this the 14th down quarter out of the past 20. It is also notable in that it will likely bring 2014 in 8% to 10% below 2011, which at one time was thought to be freakishly weak. Additionally, loan growth is expected to be slowed through 2015, as well as investment banking and mortgage banking revenues.
Credit Suisse initiated coverage of the bank with an Overweight rating and a price target of $21 on January 7. The price target implies an upside of roughly 31%.
Bank of America trades at 0.8 times book value and trades at roughly 11 times expected 2015 earnings at current prices.
Operating 5,100 banking centers, 16,300 ATMs, call centers and online and mobile banking platforms, the company continues to open new markets and expand share. The Merrill Lynch brokerage arm has continued to supply the bank with outstanding revenues and growth as well.
Shares of Bank of America were down 3% at $15.95 late in Wednesday’s trading session. The stock has a consensus analyst price target of $18.30 and a 52-week trading range of $14.37 to $18.21. The market cap is $168 billion.
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