Zacks Investment Research Lowers Bank of America (NYSE:BAC) to Sell
Zacks Investment Research downgraded shares of Bank of America (NYSE:BAC) from a hold rating to a sell rating in a research note published on Wednesday, Zacks.com reports. The brokerage currently has $32.00 price target on the financial services provider’s stock.
According to Zacks, “Bank of America's shares have outperformed the industry over the past six months. The company's earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters. Efforts to expand into new markets and digital offerings will likely enhance cross selling opportunities. Also, rise in loan balances, higher interest rates and efforts to control expenses will likely support profits. Further, the bank's enhanced capital deployment actions (approved by the Federal Reserve) reflect strong balance sheet position. However, dismal performance of capital markets amid tough operation backdrop has been hurting the bank’s investment banking and trading operations, which in turn will hurt revenue growth. Litigation issues related to its business misconducts in the pre-crisis period are likely to lead to higher legal costs.”
Several other brokerages have also recently issued reports on BAC. Oppenheimer set a $15.00 price objective on Strongbridge Biopharma and gave the stock a buy rating in a research note on Tuesday, March 26th. Jefferies Financial Group set a $158.00 price objective on HCA Healthcare and gave the stock a buy rating in a research note on Wednesday, April 17th. HSBC reissued a hold rating on shares of Societe Generale in a research note on Thursday, April 4th. ValuEngine cut Zumiez from a hold rating to a sell rating in a research report on Monday, May 13th. Finally, Berenberg Bank cut to a hold rating and dropped their target price for the company from GBX 283 ($3.70) to GBX 103 ($1.35) in a research report on Monday, June 17th. Two analysts have rated the stock with a sell rating, nine have given a hold rating and eight have given a buy rating to the company’s stock. The stock has an average rating of Hold and an average price target of $32.52.
Bank of America (NYSE:BAC) last announced its quarterly earnings data on Tuesday, April 16th. The financial services provider reported $0.70 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.65 by $0.05. Bank of America had a return on equity of 11.79% and a net margin of 25.42%. The company had revenue of $23 billion for the quarter, compared to analysts’ expectations of $23.24 billion. During the same quarter in the prior year, the firm earned $0.62 earnings per share. Bank of America’s revenue was down .4% compared to the same quarter last year. As a group, research analysts predict that Bank of America will post 2.84 EPS for the current year.
The business also recently announced a quarterly dividend, which was paid on Friday, June 28th. Shareholders of record on Friday, June 7th were given a dividend of $0.15 per share. The ex-dividend date of this dividend was Thursday, June 6th. This represents a $0.60 annualized dividend and a yield of 2.04%. Bank of America’s dividend payout ratio (DPR) is presently 22.99%.
Bank of America announced that its Board of Directors has initiated a stock repurchase plan on Thursday, June 27th that authorizes the company to buyback $30.90 billion in outstanding shares. This buyback authorization authorizes the financial services provider to reacquire up to 11.6% of its shares through open market purchases. Shares buyback plans are often a sign that the company’s management believes its shares are undervalued.
In other Bank of America news, insider Dean C. Athanasia sold 129,615 shares of the stock in a transaction on Wednesday, April 17th. The stock was sold at an average price of $29.78, for a total transaction of $3,859,934.70. Following the sale, the insider now owns 243,617 shares of the company’s stock, valued at approximately $7,254,914.26. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. 0.17% of the stock is currently owned by company insiders.
Several institutional investors have recently bought and sold shares of the company. Daily Journal Corp boosted its position in shares of Bank of America by 9,900.0% in the 2nd quarter. Daily Journal Corp now owns 230,000,000 shares of the financial services provider’s stock worth $66,700,000 after purchasing an additional 227,700,000 shares in the last quarter. Norges Bank purchased a new position in Bank of America in the 4th quarter worth $2,656,024,000. Northern Trust Corp raised its stake in Bank of America by 1.7% in the 4th quarter. Northern Trust Corp now owns 101,947,104 shares of the financial services provider’s stock worth $2,511,976,000 after acquiring an additional 1,696,074 shares during the last quarter. Harris Associates L P raised its stake in Bank of America by 0.8% in the 4th quarter. Harris Associates L P now owns 81,107,007 shares of the financial services provider’s stock worth $1,998,477,000 after acquiring an additional 669,104 shares during the last quarter. Finally, Legal & General Group Plc raised its stake in Bank of America by 5.7% in the 4th quarter. Legal & General Group Plc now owns 43,093,827 shares of the financial services provider’s stock worth $1,061,797,000 after acquiring an additional 2,322,908 shares during the last quarter. 68.19% of the stock is owned by hedge funds and other institutional investors.
Bank of America Company Profile
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 through four segments: Consumer Banking, Global Wealth & Investment Management (GWIM), Global Banking, and Global Markets.
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