What to Watch for in Bank of America Earnings

Banking, finance, and taxes

Published: April 13, 2016 1:05 pm

Last Updated: January 13, 2020 10:48 am

Bank of America Corp. (NYSE: BAC) is scheduled to report its first-quarter financial results before the markets open on Thursday. The consensus estimates from Thomson Reuters call for $0.21 in earnings per share (EPS) on revenue of $20.30 billion. In the same period of the previous year, the bank posted EPS of $0.27 and $21.42 billion in revenue.

This company is one of the top five largest banks in the world by market capitalization and is a ubiquitous presence in the United States, providing various banking and financial products and services for individual consumers, small and middle market businesses, institutional investors, corporations and governments in the United States and internationally. Operating 5,100 banking centers, 16,300 ATMs, call centers, online and mobile banking platforms, the company continues to open new markets and expand share, and the Merrill Lynch brokerage arm has continued to supply the bank with outstanding revenues and growth.

With the potential for strong commercial lending and credit card originations, and trading at just over 10 times 2016 estimated earnings, the stock makes good sense for investors now.

Recently Bank of America added $800 million, a 20% increase, to its existing buyback authorization of $4 billion. It has been more restricted than it may have preferred in the past under the Federal Reserve’s Comprehensive Capital Analysis and Review (CCAR), but this seems to be a continued gradual loosening up of its ability to send cash back to shareholders.

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A few analysts weighed in on Bank of America recently:

JPMorgan reiterated a Buy rating with a $16 price target.
Barclays reiterated a Hold rating with a $19 price target.
Sanford Bernstein reiterated an Outperform rating with a $17 price target.
Credit Suisse reiterated an Outperform rating with an $18 price target.

So far in 2016, Bank of America has underperformed the market, with the stock down about 20%. Over the past 52 weeks, the stock is down 15%.

Shares of Bank of America were trading up 4.1% to $13.82 on Wednesday afternoon, with a consensus analyst price target of $17.40 and a 52-week trading range of $10.99 to $18.48.