- BAC stock fell 11.60% in a month, 15.83% in six months, and 17.63% in a year.
- Fed Chair Jerome Powell hints toward interest rate hikes in a recent speech.
On August 25, 2023, Federal Reserve Chair Jerome Powell hinted at raising interest rates and U.S. bank stocks fell; BAC stock is down by 0.42%. At the Jackson Hole Symposium, Powell said that the Fed might have to raise interest rates to combat inflation. Last time, the interest rates remained unchanged and the market reacted positively to the news. Federal Reserve aims to keep inflation at 2%.
Bank of America Corp. (BAC Stock) – How the News is Affecting Banking Stocks
United States banking stocks negatively responded to the idea of rising interest rates again. Western Alliance Bancorp (NYSE: WAL), U.S. Bancorp (NYSE: USB), PacWest Bancorp (NASDAQ: PACW), and others reported a drop in the range of 1.2% to 2.2%.
Interest income for Bank of America Corp. for Q1 2023 was $28.66 Billion; in Q2, it was $32.35 Billion, with interest income growth coming at 14.28% and 12.91%, respectively. Funds from operation in Q2 fell by 7.72% to $9.66 Billion, while purchase/sale of investments for Q2 is $62.2 Billion.
Synovus Financial Corp. sold its BAC holdings by 1.8% in Q1. They now own 768712 shares worth $21.98 Million. Moneta Group Investment Advisors LLC increased takes by 108,111.3%; they now hold 193,168,025 shares worth $6.39 Billion. Other institutional investors and hedge funds altered their position with Bank of America Corp., suggesting that they believe in long-term growth.
Bank of America Corp. (NYSE: BAC) – Technical Analysis
BAC stock, at press time, is trading at $28.50, falling 0.42%. The previous close and open were at 28.62 and $28.64, respectively. The 52-week range is from $26.32 to $38.60, suggesting lousy news can create new lows. With an average volume of 50.18 Million, the market cap is $226.472 Billion.
The trailing twelve-month (TTM) price-to-earnings (P/E) ratio is 8.19, indicating an undervalued stock price. At the same time, the (TTM) earnings per share (EPS) is $3.48, suggesting financial strength. Analysts placed a 2.38 rating for “hold” and estimated a price target at $36.39 with a 27.7% upside.
Bank of America reported Q2 earnings on July 18, 2023, where the reported revenue of $25.197 Billion surpassed the expected value of $24.977 Billion by 0.88%. In comparison, the reported earnings of $0.88 per share also beat the estimated value of $0.84 per share by 4.78%. These positive earnings caused the BAC stock to gain nearly 13% around the release date.
The revenue gained 8.60% compared to the previous quarter, and EPS jumped by 20.55%. The subsequent earnings will be reported on October 17, 2023, where the revenue is $25.166 Billion and EPS could be $0.826. Operating expenses gained 5.01% to $16.04 Billion, and operating margin is 34.55%.
Total cash in hand at the end of the most recent quarter (MRQ) is $856.24 Billion, and total debt is $679.18 Billion. Revenue (TTM) is $96.44 Billion, and the year-over-year (YoY) quarterly revenue growth is 8.60%. BAC stock fell 1.86% weekly, 15.83% in six months, 14.23% YTD, and 17.63% in a year.
Bank of America Corp. (BAC Stock) – Candle Exploration
BAC stock consolidated in a range between March and July 2023. The financials pushed the price out but could not sustain it. Hence, the price is currently hovering above the 52-week low. But the demand zone is also a strong support and it might not allow prices to drop below it.
Experts think the price can bounce off the demand zone, but to cross R1 at $34.51 and R2 at $36.97, it must cross three hurdles first. The first is the 50EMA present at $29.91, then the 200EMA at $31.18, and the crucial resistance at $33.02. The price will also have to sustain above each to be strong enough.
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