Bank of America Earnings: What You Need To Know

5:21 pm ET, 16 Jan 2018

Bank of America (BAC)

On Wednesday morning, before the opening bell, Bank of America (NYSE: BAC) is set to release its quarterly earnings. What should you expect? 

From our perspective, the Bank has a lot of potential for growth. The Fed authorized an additional $5 billion share buyback in December 2017, on top of the Bank’s $12-billion share repurchase earlier last year.  Given the lower dividend payout ratio compared to BAC’s primary competitors, Bank of America is expected to deploy the capital towards growth, which is likely to increase the shareholder value.

The Bank of America saw their deposits continue to grow throughout 2017. Their deposits also grew during the 3 years between 2014 and 2016, despite an overall sluggish global economic environment. 

An expense sharing plan has helped the Corporation save around $8 billion.  The Bank has been fairly aggressive in consolidating branches based on customer demand—and its emphasis on digital operations (including updating ATMs with the latest technology and mobile initiatives) is leading to an increase in online customer base.

For a company that’s was facing margin pressure due to low-interest rates, it is good news to see a gradual improvement in the rate environment.  Net interest income (NII) is on an upswing given the higher interest rates and loan balance. The management team at the Bank of America is optimistic about its margins, resulting from the rate hike and a continued rise in the demand for loans.

Over the last year, BAC returned +35.59%. This return is higher than Money Center Banks Industry (18.11%), Financial Sector (9.83%), and S&P 500 (22.06%) returns.

Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finny Bites, please send us an email at hi@askfinny.com.

Bank of America Corporation (BAC) Stock Guide

Updated at: 2:22 am ET, 12 Jul 2020

Before we start: if you're looking for BAC stock price, you can quickly find it out by visiting Finny and typing "BAC quote". If you're looking for a quick scoop on BAC stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "BAC". You'll get all this info in one place. Or you can just type "BAC news" to get the latest stock news.

Looking to buy or sell Bank of America Corporation (BAC)? Interested in getting the full scoop on BAC, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this BAC stock guide, we'll address key questions about BAC, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are BAC earnings?
2. When is BAC earnings date?
3. What is BAC dividend?
4. What is BAC dividend yield?
5. What is BAC stock forecast (i.e., prediction)?
6. BAC buy or sell? What is BAC Finny Score?
7. What are the reasons to buy BAC? Why should I buy BAC stock?
8. What are the reasons to sell BAC? Why should I sell BAC stock?
9. What are BAC key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are BAC earnings?

BAC trailing 12-month earnings per share (EPS) is $2.46.

2. When is BAC earnings date?

BAC earnings date is July 16, 2020.

3. What is BAC dividend?

BAC forward dividend is $0.72.

4. What is BAC dividend yield?

BAC forward dividend yield is 3.32%.

Analyst Predictions

5. What is BAC stock forecast (i.e., prediction)?

Based on BAC analyst price targets, BAC stock forecast is $27.15 (for a year from now). That means the average analyst price target for BAC stock is $27.15. The prediction is based on 30 analyst estimates.

The low price target for BAC is $20.00, while the high price target is $37.00.

BAC analyst rating is Buy.

Analysis

6. BAC buy or sell? What is BAC Finny Score?

#{finnyScore:88}Our quantitative analysis shows 7 reasons to buy and 1 reason to sell BAC, resulting in Finny Score of 88.

7. What are the reasons to buy BAC? Why should I buy BAC stock?

Here are the reasons to buy BAC stock:

  • Bank of America is poised to succeed as a provider of retail banking and wealth management services on a nationwide scale.
  • CEO Brian Moynihan has slowly repaired years of damage while mostly staying out of the headlines.
  • Many of Bank of America's past problems were a result of poor capital-allocation decisions. The company's size (it is now too big to make material acquisitions) along with increased regulatory scrutiny reduces this risk going forward.
  • After years of facing margin pressure owing the low rates, Bank of America is finally looking forward to gradual improvement in the rate environment. Net interest yield increased from 2.19% in 2015 to 2.25% in 2016 and to 2.37% in 2017. Net interest income (NII) is also improving driven by higher rates and loan balance.
  • Further, declining expenses continue to support Bank of America’s financials. Its expense-saving plan – Project New BAC (launched in 2011) – helped improve overall efficiency and save as much as $8.0 billion in operating expenses annually till the end of 2014. Further, the same declined at a three-year CAGR of 2.6% (till 2017 end). The company continues to align its banking center network according to customers’ needs, through divestitures/consolidations of branches.
  • Moreover, Bank of America remains focused on acquiring the industry's best deposit franchise. The company’s deposit balances continued to grow, despite an overall sluggish global economic environment, at a three-year (2015-2017) CAGR of 4.6%. With steady economic growth, Bank of America’s initiatives to strengthen its deposit base will support profitability.
  • Bank of America’s sturdy capital deployment activities look impressive. In December 2017, the bank received the Fed’s approval for additional $5 billion share buyback authorization. This is in addition to its 2017 capital plan that included $12 billion share repurchase authorization and a whopping 60% dividend hike.
  • BAC profitability is improving. The YoY profit margin change was 13.77 percentage points. See BAC profitability chart.
  • BAC forward dividend yield is 3.32%, higher than the industry (1.62%) and sector (1.09%) forward dividend yields. See BAC forward dividend chart.
  • BAC PEG ratio (P/E adjusted for growth) is 3.24, which is low compared to its industry peers’ PEG ratios. See BAC PEG chart.
  • BAC average analyst rating is Buy. See BAC analyst rating chart.
  • BAC average analyst price target ($27.15) is above its current price ($24.02). See BAC price target chart.
  • BAC cash to debt ratio is 1.37, higher than the average industry (0.17) and sector (0.18) cash to debt ratio. See BAC cash to debt chart.
  • BAC Enterprise Value/Revenue multiple is 0.44, which is low compared to its industry peers’ Enterprise Value/Revenue multiples. See BAC Enterprise Value/Revenue chart.

8. What are the reasons to sell BAC? Why should I sell BAC stock?

Let's look at the reasons to sell BAC stock (i.e., the bear case):

  • A financial institution of this size and complexity is inherently unmanageable--it's even possible that regulators might decide to break up the company.
  • Bank of America has been cutting expenses for years, and the low-hanging fruit in this realm has been picked.
  • Digital competitors are nipping at the heels of traditional branched banks.
  • Challenges faced by Bank of America in improving fee income remain a major concern. Non-interest income declined at a CAGR of 2.6% over the last five years (2013-2017). Specifically, mortgage banking income is witnessing a drastic downtrend owing to a fall in refinancing and lower origination volumes.
  • Though Bank of America has resolved quite a many litigation issues, it still faces investigations from several federal agencies and a few foreign governments for its business conducts in the pre-crisis period. Legal expenses are expected to continue weighing marginally on the company’s bottom line in the near future.
  • BAC quarterly revenue growth was -18.10%, lower than the industry and sector average revenue growth (1.74% and 2.03%, respectively). See BAC revenue growth chart.

Key Stats

9. What are BAC key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for BAC:

Metrics BAC
Price $25.39
Average Price Target / Upside $27.15 / 6.93%
Average Analyst Rating Buy
Forward Dividend Yield 3.32%
Industry Banks - Global
Sector Financial Services
Number of Employees 204,000
Market Cap $188.35B
Forward P/E Ratio 9.69
Price/Book Ratio 2.31
Revenue (TTM) $81.6B
YoY Quarterly Revenue Growth -18.10%
Profit Margin 29.57%

If you liked this analysis, check out Stock Guides for other stocks.

Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finny Bites, please send us an email at hi@askfinny.com.

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