Yet that impatience may be misplaced. With inflation and economic trends straining customers, more of them may default on personal loans that banks like Bank of America were all too pleased to make a year ago. With stories from Autos, Supercars, Electric Vehicles, Automotive Industry, General Motors, BMW, Motorsport, Motor Racing, Classic Cars. The high in the last 52 weeks of Bank of America stock. This is a stock worth buying on any dip. The Dividend Yield is 2.7%. BAC shares are at 1.55x Price / Tangible Book Value (P/TBV), which we believe implies a normalized P/E of just over 10x. Bank of America reported a net income of $7.1 billion in 3Q 2022, compared with $6.2 billion in 2Q 2022 and $7.7 billion in 3Q 2021. Bank of America pays a generous dividend and is aggressively buying back stock - the two key catalysts for future multiple expansion. ALLT Stock Price Prediction $6.50 (68.83% Upside) Based on 1 Wall Street analysts offering 12 month price targets for Allot in the last 3 months. In my valuation, I estimate Bank of Americas total assets growth rate from 2022 to 2032, based on the companys performance in the past years and the macroeconomic outlook. While that earnings multiple is in line with the conservatism seen since the Great Financial Crisis, I have the opinion that over time, the share repurchases should eventually lead to multiple expansion. Compared with Net Income of $16.5bn in 2021, which was after $11.3bn of credit costs, the P/E is 16x. Then, based on the companys total revenue to total assets ratio (which is relatively stable), and BACs capital Tier 1 ratio, I estimate its net income from 2022 to 2023. In the third quarter, BACs pre-tax, pre-provision net income grew 10%. The selloff in Bank of America shares could be described as a panic-driven event. The vast majority of economists think the future recession will be mild at worst, non-existent at best. Our team adapted well to our new capital requirements and improved our CET1 ratio by 49 basis points to 11%, above our new regulatory minimums, he continued. According to today's jobs data, the U.S. economy added 263K jobs in September, down from 315K in August. As a result, it is observable that Bank of America has improved its efficiency ratio in recent quarters except in the third quarter of 2022 (see Figure 1). So far, Bank of America hasnt faced a ton of pressure from yield curve inversion. This is a stock worth buying on any dip. I am not receiving compensation for it (other than from Seeking Alpha). I believe Bank of America's stock will soon trade at a discount to book value, reflecting the bank's weakening macroeconomic environment. I wrote this article myself, and it expresses my own opinions. 13 equities research analysts have issued 12 month price objectives for Bank of America's shares. Basically, 2 year treasuries are not viable alternatives to savings accounts. I/we have a beneficial long position in the shares of BAC either through stock ownership, options, or other derivatives. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. Free current stock price quotes and data for Bank of America Corp (BAC). In August, inflation was 8.3%, and the rate for September is anticipated to be even higher. In the third quarter of 2022, Bank of America reported a Tier 1 ratio of 12.8%. Bank of America (BAC) $37.85 0.85 (2.30%) 18:30 EST BAC Stock Quote Delayed 30 Minutes 7 Cheap Blue-Chip Stocks to Buy Before They Rebound By Joel Baglole, InvestorPlace Contributor Nov. The 10 year treasury rate and 30 year mortgage rate have quickly returned to 2018 levels. However, compared with the second quarter of 2022, its net income is up 15%. Compared with Net Income of approximately $30bn in both 2019 and 2021, the implied P/E is around 9x. Based on next years consensus, the likelihood of a severe recession is quite low. Moynihan stated at the same investor conference this week that investment banking revenues were down 55-60% year-on-year in Q4, but offset by Markets revenues being 10-15% higher, the latter due to Equity revenues being flattish but Fixed Income revenues growing 20% thanks to market volatility. In my valuation, I estimate Bank of Americas total assets growth rate from 2022 to 2032, based on the companys performance in the past years and the macroeconomic outlook. BACs ROTCE took a step change in 2018, jumping from below 10% in the years preceding it to mid-teens after (except the COVID-impacted 2020). In the first quarter of 2022, which ended on 31 Mar 2022, both revenues and expenses increased and led to 71 bps improvement and sat at 66.04% in BACs efficiency ratio. BACs current market capitalization is $269.1bn. 808 certified writers online. Negative dynamics for Bank of America shares will prevail with possible volatility of 2.587%. In my opinion, the only thing that may cause Bank of America's stock to defend a premium book valuation is if a U.S. recession is avoided. If Bank of America's credit provisions rise in 3Q, as I think, it might be interpreted as a warning sign that rougher times are ahead for the company and the broader U.S. banking sector. https://seekingalpha.com/article/4563087-bank-of-america-stock-bargain-after-decline . For BAC stock to have a P/B ratio near the five-year low. At $32.98, BAC stock is trading at 1.55x its Q3 2022 TBV of $21.21. Non-Interest Revenues are coming down from COVID highs, but the net impact will be relatively modest. Bank of America Stock Forecast 12-13-2022. Excludes $2.07bn First Data JV impairment in 2019. According to the companys 3Q 2022 financial results, its net income decreased by 8% YoY. With interest rates rising, shouldn't BAC be simply rising? It is possible that all the stock needs is an earnings boom from rising interest rates, the kind of macro event that could stir enthusiasm in the stock. The average price target of $48 per share represents only 30% upside. Research news, charts, stock market performance and earnings. Since then, BAC shares have returned 27% (with dividends) in just over 3 years, despite having fallen 34% from their peak in January 2022. View daily, weekly or monthly format back to when Bank of America Corporation stock was issued. The companys net reserve release of $1.1 billion in 3Q 2021 turned into a net reserve build of $378 million in 3Q 2022. For Q1-3 2022, BAC had a ROTCE of 14.9%, JPMs ROTCE is only 13% higher at around 17%. I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. In its most recent quarter, BAC increased loan loss provisions by $1.5 billion, indicating that it expects an increase in defaults. SDG Investors All rights reserved. The stock peaked in December of 2021 with a price just above $42. the general economic situation since the publication of 2Q-22 earnings, I believe it is just a matter of time before Bank of America's stock begins to trade at a discount to book value. When banks tighten their lending standards to limit default risks, it is a significant indicator that investors should avoid investing in the banking sector. Today's Change-0.06 (0.18%) Bid (Size) $32.34 (20) First, we can touch on the yield curve. Source: BAC results presentation (Q3 2022). I wrote this article myself, and it expresses my own opinions. This digital newspaper is written by artificial intelligence and powered by mindtalks , if you are looking for a digital newspaper written by changemakers please visit sdgtalks.ai Copyright 2022. The average Wall Street rating is only 3.96 out of 5. Considering BACs quarterly efficiency ratio indicates that, in December 2021, the company increased its ratio as its revenue decreased albeit its expenses increased very slightly. Amid the panic in Bank of America shares, I bought. Many competing firms like Ally Financial (ALLY) offer high-yield savings accounts and newer generations might not be willing to give up those higher rates. Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. Our U.S. consumer clients remained resilient with strong, although slower growing, spending levels and still maintained elevated deposit amounts, the CEO commented. Growth in Net Interest Yield has been helped by a mix shift in Interest-Earning Assets to Loans & Leases, which represents 39% of Interest-Earning Assets but has a Net Yield that is about one third higher (394 bps vs. 294 bps in Q3 2022). Yahoo. In my view, the better metric to track is that of average deposits. Quotes Snapshot > BAC. Something like this could happen, but then there wouldnt be a recession, as the consensus implies. That was clearly exceptional and, at the other two troughs, BACs P/TBV multiple was around 1.4x: BAC Stock Price & Valuation Troughs (Since 2018). My thesis on why cannabis stocks are a generational secular growth story. In my opinion, the ultimate indicator that it is time to avoid cyclical banks is when their equities begin to trade at discounts to book value. Its unfortunate for Bank of America that this is happening, but as mentioned earlier, its only 4.8% of the total business. If this occurs, then its net interest yield may struggle to increase, making rising interest rates a necessity. However, compared with the second quarter of 2022, its net income is up 15%. BAC stock is at a 17% discount to JPMorgan (JPM) on a P/TBV basis, more than is justified in our view. Seemingly everybody thinks a recession is coming, and some think that the coming recession will be severe. The latest price target for Bank of America ( NYSE: BAC) was reported by Piper Sandler on Thursday, December 8, 2022. There are two key risks here. Its being caused by a dearth of tech IPOs, which largely stopped happening when tech stocks crashed. I wrote this article myself, and it expresses my own opinions. Now, its possible that well get something totally unlike the forecast. Using the free cash flow to equity (FCFE) model, I evaluate that BAC is worth more than $43 per share. PEACE, JUSTICE AND STRONG INSTITUTIONS, 2 and 10 year treasuries. The stock trades at just 10x forward earnings. Another element in my valuation is the stocks Tier 1 ratio. Please. 14 Wall Street analysts covering (NYSE: BAC) stock is to Buy BAC stock.Out of . I am not receiving compensation for it (other than from Seeking Alpha). Due to BACs continuing organic growth in the consumer banking segment, global banking segment, global wealth & investment management segment, and global markets segment, I expect the company to report solid financial results in the following years. But generally, a higher sustained rate environment will help us earn a lot more money. In the current one, even the 1 month bill has a higher yield than the 10 year bond. Combined with the fact that deposits are higher than 2018 levels and still growing, this factor alone could account for a sizable increase in earnings. It really looks like the worst has been more than priced in for Bank of America, and that the ongoing panic selling presents a buying opportunity to long term investors. This means BAC would almost certainly again achieve profitability every quarter and continue to add to its TBV. SDG Investors All rights reserved. Additional disclosure: I own the stocks in the Best of Breed portfolio. Read More Earnings see more Analyst Ratings see more Q How do I buy Bank of New York Mellon (BK) stock? A negative 2/10 spread isnt a problem for BAC, because savers have to commit to a 2 year treasury investment in order to guarantee the high yield. A comparison of the 2016 and 2018 P&L statements shows how 2018 represents the real BAC (we have skipped 2017 because it contained one-off tax items related to the U.S. tax cut that year). Let's calculate a back-of-the-envelope projection of that earnings upside. Based on the current $295 billion market cap, these numbers would represent almost 10% of shares outstanding. The performance of the stock was mixed when compared to some of its competitors In a short term, a correction is expected to the 0.5 Fibo level with a $34 price target. What's more, the company is a free cash flow machine, returning more cash to shareholders than net income through dividends and share repurchases. How did Martin Luther King use ethos , pathos, and logos? Further, any economic weakness arguably should be near term in nature. That is much higher than the $47 billion of net interest income earned in 2018, largely because earnings assets stood at only $1.98 billion then. The March 2020 trough, following the start of COVID lockdowns in the U.S. and Europe, saw BACs P/TBV multiple fell to around 1x. Find real-time BAC - Bank of America Corp stock quotes, company profile, news and forecasts from CNN Business. Tencent Music Entertainment (NYSE:TME) shares were upgraded by Morgan Stanley on Thursday, with the investment firm citing " sustainable growth" and a strong free cash flow yield.Analyst Alex Poon raised his rating on Tencent Music Entertainment shares to overweight from equal weight and boosted his price target to $8.50 from $4.50, noting that the company's profit has . BACs noninterest expense of $15.3 billion in 2Q 2022 remained the same in 3Q 2022. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. I used this growth rate to estimate BACs total assets from 2022 to 2032. BAC shares have fallen 13% in December and are now at 1.55x tangible book, 10x normalized P/E and a 2.7% Dividend Yield. According to Wall Street analysts, the average 1-year price target for BAC is 42.26 USD with a low forecast of 32.32 USD and a high forecast of 57.75 USD . Then, Brian Moynihan said that investment banking fees would decline 60% in the fourth quartertheyd been declining prior to that, but -60% would be the worst decline this year. Price Target. Today, it trades at 10.25 times earnings and 1.08 times book value. Next, theres the decline in investment banking fees. Hi there, I am Amanda and I work as an editor at impactinvesting.ai; if you are interested in my services, please reach me at amanda.impactinvesting.ai. Interest rates are rising, yet Bank of America stock is still cheap. S Stock Price - SentinelOne, Inc. engages in the provision of endpoint security software that detects, models, and predicts threat behavior to block attacks on any computing device. Statements 1 and 3 above are official forecasts by BAC analysts, the second one is a personal opinion of Brian Moynihan. Thats a positive figure but its low enough to have two quarters of negative growth plus declining employment in the mix. (The same is true for Net Income.) Drew Angerer Last week, Bank of America ( NYSE: BAC) crashed 10%, as a slew of bad news reports rocked the financial services sector. Q4 2022 is likely to be similar. Bank of America's stock, on the other hand, traded at a discount to book value whenever severe economic disasters occurred. The companys provision for credit losses increased from $0.5 billion in 2Q 2022 to $0.9 billion in 3Q 2022. There are at least two potential reasons why the stock is down. In the third quarter of 2022, notwithstanding a slight decline to 64.83% versus its previous level of 68.9% at the end of 2Q 2022, BACs efficiency ratio is still well higher than its level at the same time in 2021. An investment in Bank of America, at its heart, reflects cyclical banking exposure. In the past 5 quarters, BACs Net Interest Yield (as reported) has risen by 23% from 168 bps to 206 bps: BAC Net Interest Yields (FTE Basis) (Last 5 Quarters). Thus, I think the stock is a buy. Besides growing its deposit base, I can see earnings upside from rising interest rates and more importantly, rising net interest yields. In that scenario, ordinary Americans can go on Treasury Direct and buy one month 3.8% APY bonds that pay 0.3% when they mature. It is possible that BAC has to eventually increase the cost of deposits, or risk ceding deposits to competition. In the third quarter of 2022, BACs net interest income (NII) increased by 24% YoY to $13.8 billion, driven by benefits from higher interest rates, including lower premium amortization expense, and solid loan growth. If they want to cash out in less than 2 years, they risk selling at a loss. Among its peer companies, a 1.45% price decline was seen in JPMorgan (JPM) while 4.6% was observed in Citigroup (C) shares. is up 15%. Bank of America Corporation (BAC) stock forecast and price target Find the latest Bank of America Corporation BAC analyst stock forecast, price target, and recommendation trends with in-depth. Forecast target price for 12-13-2022: $ 31.05. Save my name, email, and website in this browser for the next time I comment. The average BANK OF AMERICA CORP stock forecast 2023 represents a -16.61% decrease from the last price of $32.7400016784668. In the global banking segment, BACs net income increased from $1.5 billion in 2Q 2021 to $2.0 billion in 3Q 2022. First, the yield curve reached its deepest inversion since 1990, with a -75 basis point spread between 2 and 10 year treasuries. For BANK OF AMERICA CORP stock forecast for 2023, 12 predictions are offered for each month of 2023 with average BANK OF AMERICA CORP stock forecast of $27.3, a high forecast of $30.58, and a low forecast of $26.33. Moynihans comment) dealt with the company itself, while the other big banks were only indirectly affected. 12/08 06:00. . Please. Since then, it has tumbled badly, losing 75% of its share . Unlike during the Great Financial Crisis, BAC's balance sheet is conservatively leveraged - purposefully such that the GFC can never happen again. With shares at $32.26, we expect an exit price of $56 and a total return of 82% (22.5% annualized) by the end of 2025. The negative growth in earnings was entirely due to the reserve build. Headwinds in the U.S. economy suggest that banks asset bases will see deteriorating quality. This is because, while BACs revenues have grown less quickly, it has been able to achieve this growth with essentially flat expenses; JPM expenses have grown by 17% since 2019. A financial researcher and avid investor with a keen eye for innovation and disruption, as well as growth buy-outs and value stocks. The 16% NII growth in 2016-18 was driven by both balance sheet growth and higher rates, with Total Interest-Earning Assets growing 6.1% and Net Interest Yield on Earning Assts growing 8% from 227 bps to 245 bps: BAC Earning Assets & Net Yields (2016-18). Moynihans statement about an expected 60% decline in fees coincided with last weeks 10% selloff. When the 1 month treasury has a serious yield on it, things change. We have just calculated that the company might earn around $5.14 in earnings per share if current interest rates remain where they are for the long term. I have no business relationship with any company whose stock is mentioned in this article. Because inflation remains a major concern for consumers, I am concerned that retail enterprises and banks may face a wave of loan defaults as more and more people are forced to choose between paying their grocery bill and making a payment on their personal loans. According to my calculations, with total assets CAGR of 1.4% to 1.6%% from 2022 to 2032, Tier 1 ratio of 13%, and COE of 8.5% ( I calculated the COE of BAC using the companys P/B value, ROE, and U.S. 10-year treasury bond yield), Bank of America stock is worth $43.28 per share in my view. Major banks are likely to experience a continuation of 2Q-22 asset quality trends in the third quarter, giving the market a solid cause to discount institutions like Bank of America's cash flows and profits prospects. Management targets a Payout Ratio of around 30%, and the dividend was raised by 5%. Currency in USD 2W 10W 9M 32.38. Bank of America's 3Q-22 results will be out in around ten days, therefore purchasing the shares is out of the question for me. Discover our growing collection of curated stories on Sports Cars. This means that even a repeat of the $7.6bn reserve build in Q1-2 2020 would represent a relatively modest figure next to BACs TBV. If GDP grows .04%, then it reaches $10,040 in 2023. Sure, that catalyst has not played out over the past decade, but I suspect that it is only a matter of time before investors wake up to this name. Seeking Alpha: Call Transcripts: Nasdaq: Insider Trading: Nasdaq: Institutional Ownership: Nasdaq: Option Chain: SEC: Bank of America, for example, has traded at a premium to book value when the Consumer Bank, which acts as a proxy for the American economy, performed well. Impact of Non-Interest Revenues normalizing from COVID highs should be modest; credit costs should be manageable even in a recession. BAC stock pays a dividend of $0.22 per quarter, or $0.88 annualized, representing a Dividend Yield of 2.7%. With short term treasuries offering so much yield, Bank of America may face pressure to up its savings account interest. Relative to our assumed long-term ROTCE of 15%, this implies a P/E of 10.4x. In its 3Q 2022 financial results, BAC reported total revenue (net of interest expense) of $24.5 billion, compared with $22.7 billion in 2Q 2022 and $22.8 billion in 3Q 2021. BAC CEO Brian Moynihan expressed confidence about further loan growth and NII increases at an investor conference this week: We'll be up somewhere between $900 million and $1 billion (in NII) this quarter We feel pretty good about loans growing mid-single digits. I used two approaches to build my way of using the FCFE model for evaluating bank stocks. So, 1 month treasuries are a good alternative to the 0.1% annual interest savings accounts BAC is offering in New York. It comes down to fundamentals. The stock is a buy. Our return forecasts indicate a total return of 82% (22.5% annualized) by 2025 year-end. Given that the U.S. economy has already experienced two quarters of negative GDP growth, I believe the chances of this happening are extremely low. Lets say we have a country called Growth Land that has $10,000 in GDP in 2022. The average ROTCE across 2018 to Q1-3 2022 is 14.6%. It makes little sense to go public in a weak market. Finally, theres scenario 3, in which we get a mild recession at the start of the year followed by a brisk recovery. View real-time stock prices and stock quotes for a full financial overview. Bank Of America Stock: Step Up To The Plate (NYSE:BAC) Seeking Alpha He also worked as a Junior Analyst for Kerrisdale Capital, a $300 million New York City-based hedge fund . Most of the upside is expected to come from an upward re-rating in BACs P/E, but the Dividend Yield (currently 2.7% and growing) and the forecasted 4% EPS CAGR during 2021-25 alone should give a high-single-digit annualized return. So, I would expect Bank of Americas Q4 NII growth to be slower than in previous quarters, but still positive. The stock is a buy. I wrote this article myself, and it expresses my own opinions. In its most recent quarter, Bank of America reported 24% growth in net interest income (NII,) despite the 2/10 year spread being negative at the time. Also, according to the second approach, I calculate the FCFE of the company. We keep the assumptions in our forecasts unchanged: Our new 2025 EPS forecast remains unchanged at $4.17: With shares at $32.26, we expect an exit price of $56 and a total return of 82% (22.5% annualized) by the end of 2025. Bank of America: Why I Bought The Panic. With respect to the $10.3bn increase in Net Income, NII growth was the biggest contributor at $7.1bn (pre-tax), Non-Interest Expense reduction was next biggest at $1.9bn, and Income Tax Expense was $0.8bn lower despite a higher Pre-Tax Income: Source: BAC results supplement (Q4 2018). To analyze the managements ability to keep expenses and revenues in check, I consider Bank of Americas efficiency ratio in 3Q 2022, and compare it with the third quarter of 2021. Spencer Platt. (BAC) NYSE - NYSE Delayed Price . INDUSTRY, INNOVATION, AND INFRASTRUCTURE, 12. I expect the stock to re-value higher over the long term - towards an earnings multiple of at least 15x (I would not be that surprised to see the stock approach 20x). Dividend yield allows investors, particularly those interested in dividend . Bank of America Corporation 7.25%CNV PFD L (BAC.PL) Stock Price Today, Quote & News | Seeking Alpha Ex-Dividend Date 9/30/2022 Payout Date 10/31/2022 Frequency Quarterly More on Dividends . Looking for a portfolio of ideas like this one? The company continues to aggressively grow its deposit base, but investors should keep a close eye on that key metric. Bank of America got hit harder than most banks in last weeks selling. Bank of America Corp (BAC) NYSE Create Alert Add to Watchlist 32.38 -0.06 -0.18% 09/12 - Closed. Given the current short-term trend, the stock is expected to rise 13.75% during the next 3 months and, with a 90% probability hold a price between $36.91 and $45.44 at the end of this 3-month period. Yes. Year to date, Bank of Americas (NYSE:BAC) stock price is down by 19%. For example, a severe recession and negative full year growth, or no recession at all. On average, they expect the company's share price to reach $44.68 in the next twelve months. Pessimistic target level: 30.52. Seeking Alpha is a platform for investment research, with broad coverage of stocks, asset classes, ETFs and investment strategy. Across the bank, we grew loans by 12% over the last year as we delivered the financial resources to support our clients. According to 31 analysts, the average rating for BAC stock is "Buy." The 12-month stock price forecast is 42.26, which is an increase of 30.51% from the latest price. Bank of America's credit provisions, in particular, increased to $523 million in the second quarter, a clear indicator that asset quality may be degrading more broadly amid a rising set of issues for the American consumer. First, in a weak economy BAC would likely see increased credit losses. Credit costs, even in the event of a recession, should be manageable. Net Interest Income (NII) is up 24% year-on-year as of Q3, thanks to the Feds rate hikes and the resumption of loan growth. In global wealth and investment management, BACs net income of $5.4 billion in 2Q 2022, remained the same in 3Q 2022. BAC has kept its total expenses at $15.3bn in the last 3 quarters, despite elevated inflation, and its Efficiency Ratio has continued to improve (to 62% by Q3), towards to high 50s level that prevailed before COVID-19. Thats very cheap. First, the yield curve reached its deepest inversion since 1990, with a -75 basis point spread between 2 and 10 year treasuries. Currency in USD ( Disclaimer ) After Hours 32.36 -0.03 -0.08% 18:58:55 - Real-time Data Type:. BACs NII has been growing rapidly this year, thanks to the Feds rate hikes and the resumption of loan growth. So, these stocks are best avoided . According to the current price, Bank of America is 110.44% away from the 52-week low. In the third quarter of 2022, BACs average loan and lease balances increased by 12% YoY and 1% YoY to $1.0 trillion and $2.0 trillion, respectively. Net Interest Income is up 24% year-on-year as of Q3, thanks to the Feds rate hikes and the resumption of loan growth. Using the free cash flow to equity (FCFE) model, I evaluate that BAC is worth more than $43 per share. So, BACs brokerage revenue could help buffer against possible yield curve and deal making impacts in Q4. And that's why we run the company with such a balance. In the past 5 quarters, BACs Total Average Loans & Leases have risen 12% year-on-year: BAC Average Total Loans & Leases (Last 5 Quarters). After normalizing provision for credit losses, the company earned around $3.03 in earnings per share during 2020 when interest rates plummeted. About the Bank of America Corp. stock forecast. Finally, theres brokerage fees. company continues to reward shareholders through generous share repurchases and dividends. Wall Street consensus estimates call for solid double-digit earnings growth beyond 2022. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. If economists average forecast is hit, then well likely get something like scenario 3. While BAC does have quite a few red flags as well, it's well worth noting that its non-U.S. lending book does not have exposure to offshore-based countries, which suggests that WFC is in even a much more risky posture. Analyst Forecast. And this year, it's exceeded that, but that's because of the NII. BAC has been a core holding in our portfolio for more than a decade, and we initiated our coverage of BAC on Seeking Alpha with a Buy rating in October 2019. Is this happening to you frequently? And while the unabating demand for tech solutions in the digital era might help big tech companies survive a high-interest-rate environment, in our view SentinelOne (S), Marqeta (MQ), C3.ai (AI), and Velo3D (VLD) do not look well-positioned to stay afloat. Sensing that the shares were unfairly beaten down, I figured that the apparent risk factors would blow over and that BAC would do again in Q4 what it did in Q3: beat expectations. Certainly, the ever-steepening yield curve inversion looks bad for banks, but the banks borrow short and lend long theory has been failing empirically in recent years. Brokerages are generally doing well this year, as the volatile market has led to high trading volume. BAC stock is at a 17% discount to JPMorgan on a P/TBV basis: While JPM has historically achieved a higher ROTCE than BAC, we do not believe the difference justifies the valuation gap. In the consumer banking segment, BACs net income increased from $2.9 billion in 2Q 2022 to $3.1 billion in 3Q 2022, driven by increased consumer checking accounts, and digital sales growth of 36%. There arent that many scenarios in which GDP grows 0.4% for the full year but a deep recession occurs in the interim. In global markets segment, the companys net income of $1.0 billion in 2Q 2022 increased to $1.1 billion in 3Q 2022. ablokhin/iStock Editorial via Getty Images. Please disable your ad-blocker and refresh. Bank of America Corp BAC:NYSE. When I last reviewed Bank of America, I mentioned that fundamentals such as asset quality trends and slowing growth in the Consumer Bank were concerning. Credit costs, even in the event of a recession, should be manageable. Vote00UndoFollow Replies 1 Oldest first Newest first Oldest first 0 Under review SA Admin. JPMorgan Chase Employees & Partners Donate 500+ Needed Items to Mark Veterans Day Norwood News, UPDATE 3-List of bidders for Citigroups Mexican retail arm shrinks as Inbursa drops out Yahoo Finance, Bank Of America: Expect It To Report Strong Net Income (NYSE:BAC). 9. Their BAC share price forecasts range from $33.00 to $64.00. The last reported interest rate at the end of May 31st, 2022, was 1.645%, with $159.750 million outstanding. The Q1 drop (50%) would be the steepest in recorded history, while the Q4 gain (111.6%) would also be the highest in recorded history. If you break it down by quarter, there are many ways in which $10,000 could grow to $10,040, as shown in the table below: As you can see, all of these scenarios result in 0.4% full year GDP growth. This Silicon Valley tech firm has taken a hard hit in recent months. Then, Brian Moynihan said that. Big profits are available for the taking, but you must act now. Bank of America Corporation (BAC) Stock Price, News, Quote & History - Yahoo Finance S&P 500 Bank of America Corporation (BAC) NYSE - NYSE Delayed Price. Weve seen inverted yield curves before, they didnt kill BACs margins. Under CECL accounting standards since the start of 2020, banks have had to reserve for all expected credit losses upfront (albeit using probability-weighted figures from a range of scenarios). BAC credit reserves peaked at $21.1bn, or 1.96% of loans and leases outstanding, at Q2 2020 (compared to $13.5bn and 1.27% respectively at the start of 2020). 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