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Bank of America Corporation (BAC), boasting a market cap of $315.2 billion, is a major financial services provider offering a diverse range of banking and financial products globally. Based in Charlotte, North Carolina, it serves a broad spectrum of clients, including individual consumers, small to large businesses, institutional investors, corporations, and government entities.
BAC stock has slightly outperformed the broader market over the past 52 weeks. BAC has gained 26.4% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 20.5%. In 2024, shares of BAC are up 19.7%, compared to SPX's 15.8% gains on a YTD basis.
However, zooming in further, BAC has lagged behind the S&P Bank ETF SPDR's (KBE) 28.6% gains over the past 52 weeks.
With the Fed signaling upcoming interest rate cuts, Bank of America could benefit from lower rates by offering reduced deposit rates and seeing increased loan demand from consumers and businesses, potentially boosting revenue. Although the exact timing of these rate cuts is uncertain, this shift could enhance the company's financial prospects.
Additionally, shares of Bank of America rose in the two subsequent trading sessions after beating Wall Street’s expectations in its second quarterly earnings released on July 16. The bank reported Q2 2024 EPS of $0.83, beating the $0.79 estimate, and net revenue of $25.4 billion, slightly above the forecast, thanks to a 6% revenue increase in its global wealth and investment management business and a strong performance in its global markets segment. Additionally, the bank benefited from a rebound in mergers and acquisitions, boosting its investment banking fees.
For the current fiscal year, ending in December, analysts expect BAC’s EPS to decline 4.7% to $3.26 on a diluted basis. However, the company has a track record of consistently beating consensus estimates in the last four quarters.
Among the 25 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on 12 “Strong Buy” ratings, two “Moderate Buy,” and 11 “Holds.”
This configuration is slightly more bullish than a month ago when there were 10 “Strong Buy” ratings.
On July 30, analyst Betsy Graseck of Morgan Stanley (MS) maintained a “Buy” rating on Bank of America with a $49 price target, which implies an upside potential of 21.6%.
The mean price target of $43.70 for BAC suggests an upside potential of 8.4% from the current price level.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
