What to Expect When Bank of America Reports Wednesday

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Bank of America Corp. (NYSE: BAC) is scheduled to release its fourth-quarter financial results before the markets open on Wednesday. The consensus estimates call for $0.68 in earnings per share (EPS) and $22.35 billion in revenue. The same period of last year reportedly had $0.70 in EPS and $22.89 billion in revenue.

The company posted solid third-quarter results and is one of the top picks across Wall Street now. Bank of America 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.

The bank reported that third-quarter net income rose 4% to $7.5 billion. The adjusted net income of $0.56 a share exceeded the consensus estimate of analysts. Three of the bank’s four main divisions reported gains in revenue, led by its global banking business, with an 8% increase to $5.2 billion on higher investment banking fees.

The stock closed out 2019 with a share price of $35.22. That brought a total return of almost 43%, but the 52-week high of $35.72 has been coming with more resistance than when it was lower. Where the problem arises here is that analysts ended 2019 with a consensus target price of $35.22, implying no price gains, and the expected total return of 2% would be entirely from its dividend.

Excluding Tuesday’s move, Bank of America had outperformed the broad markets, with the stock up 35% in the past 52 weeks. Over the past quarter, the stock was up 21%.

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

  • D.A. Davidson has a Neutral rating with a $36 price target.
  • UBS Group has a Neutral rating and a $36 target price.
  • Barclays has an Overweight rating with a $43 price target.
  • BMO Capital Markets rates it as Market Perform with a $37 target.
  • Citigroup has a Neutral rating with a $37 target price.
  • Morgan Stanley has a Buy rating and a $38 price target.

Shares of Bank of America traded up more than 1% at $35.50 late Tuesday morning, in a 52-week range of $26.05 to $35.72. The consensus price target is $36.88.

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