What to Watch in Bank of America's Q4 Report

Banking, finance, and taxes

Published: January 15, 2019 2:00 pm

Last Updated: January 31, 2020 1:59 am

Bank of America Corp. (NYSE: BAC) is set to release its most recent earnings report before the markets open on Wednesday. The consensus estimates from Thomson Reuters are $0.63 in earnings per share (EPS) and $22.45 billion in revenue. In the fourth quarter of last year, the bank reported EPS of $0.48 on $21.59 billion in revenue.

Bank of America’s fate is tied directly to peers and competitors. The whole banking sector was weak heading into 2019, and it remains in question whether the Federal Reserve’s quest to raise interest rates will lead (or already has) to “overshooting” on a new neutral rate policy target.

An inverted yield curve, where short-term yields are higher than intermediate-term ones, can signal woes for the banking community because they pay out more short-term than they may earn in their longer-term investments.

Bank of America is already one of the most shorted stocks in the New York Stock Exchange. This bank most recently saw its short interest decrease to 144.28 million shares, with 1.5 days to cover. The previous level was 147.89 million. And with all this pressure, it’s obvious why the stock is down 14% in the past 52 weeks. However, in the near term, the stock is up about 7% year to date.

In the third-quarter report, book value per share was $24.33 and tangible book value per share was $17.23.

A few analysts weighed in on Bank of America ahead of the report:

Edward Jones has a Buy rating.
UBS Group’s Buy rating comes with a $32 price target.
Jefferies has a Buy rating.
Macquarie has a Neutral rating.
Robert Baird has a Hold rating with a $28 price target.
Barclays has an Equal Weight rating and a $34 price target.

Shares of Bank of America were last seen up about 1% at $26.62, in a 52-week range of $22.66 to $33.05. The stock has a consensus analyst price target of $32.00.