Stock of the Day

November 27, 2019

Bank of America (BAC)

$44.80
-$0.51 (-1.1%)
Market Cap: $347.58B

About Bank of America

Bank of America Corporation, through its subsidiaries, provides banking and financial products and services for individual consumers, small and middle-market businesses, institutional investors, large corporations, and governments worldwide. It operates in four segments: Consumer Banking, Global Wealth & Investment Management (GWIM), Global Banking, and Global Markets. The Consumer Banking segment offers traditional and money market savings accounts, certificates of deposit and IRAs, non-interest and interest-bearing checking accounts, and investment accounts and products; credit and debit cards; residential mortgages, and home equity loans; and direct and indirect loans, such as automotive, recreational vehicle, and consumer personal loans. The GWIM segment provides investment management, brokerage, banking, and trust and retirement products and services; wealth management solutions; and customized solutions, including specialty asset management services. The Global Banking segment offers lending products and services, including commercial loans, leases, commitment facilities, trade finance, and commercial real estate and asset-based lending; treasury solutions, such as treasury management, foreign exchange, short-term investing options, and merchant services; working capital management solutions; debt and equity underwriting and distribution, and merger-related and other advisory services; and fixed-income and equity research, and certain market-based services. The Global Markets segment provides market-making, financing, securities clearing, settlement, and custody services; securities and derivative products; and risk management products using interest rate, equity, credit, currency and commodity derivatives, foreign exchange, fixed-income, and mortgage-related products. Bank of America Corporation was founded in 1784 and is based in Charlotte, North Carolina.

Bank of America Bull Case

Here are some ways that investors could benefit from investing in Bank of America:

  • Bank of America reported a strong quarterly earnings per share (EPS) of $0.82, exceeding analysts' expectations of $0.77, indicating robust financial performance.
  • The company has shown a significant revenue increase of 15.0% year-over-year, with $25.30 billion in revenue for the latest quarter, suggesting strong growth potential.
  • With a current stock price of $46.98, Bank of America is trading near its 52-week high of $48.08, reflecting positive market sentiment and potential for further appreciation.
  • The firm has a dividend yield of 2.21%, providing a steady income stream for investors, which is attractive in a low-interest-rate environment.
  • Analysts have a consensus rating of "Moderate Buy" with an average price target of $48.58, indicating confidence in the stock's future performance.

Bank of America Bear Case

Investors should be bearish about investing in Bank of America for these reasons:

  • The company has a debt-to-equity ratio of 1.04, which indicates a relatively high level of debt compared to equity, potentially increasing financial risk.
  • Bank of America has a quick ratio and current ratio of 0.78, suggesting that the company may struggle to meet short-term liabilities with its current assets.
  • Despite recent positive earnings, the stock has faced volatility, as indicated by a beta of 1.33, which means it is more volatile than the market, posing risks for conservative investors.
  • One research analyst has rated the stock with a sell rating, indicating some skepticism about its future performance amidst a generally positive outlook.
  • Market conditions can change rapidly, and any downturn in the financial services sector could adversely affect Bank of America's performance and stock price.

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