This Bank Is Looking Like A Buy This Earnings Season
Photo Credit:Mike Mozart
Bank of America (BAC) Financials - Diversified Financial Services | Reports October 17, Before Market Opens
Key Takeaways
- The Estimize consensus is calling for earnings per share of 35 cents on $20.85 billion in revenue, 1 cent higher than Wall Street on the bottom line and roughly in line on the top
- Bank of America is expecting a strong third quarter report after JPMorgan, Wells Fargo and Citigroup all beat expectations today
- The bank is expected to see improvement across the board from a bounce in trading activity, improving energy sector, and efficient cost controls
- What are you expecting for BAC? Get your estimate in here!
Bank of America is scheduled to report third quarter earnings early Monday morning and is the last of the retail banks to release results this season. Strong reports from JPMorgan (JPM), Wells Fargo (WFC) and Citigroup (C) this morning lead investors to believe Bank of America is in store for a good report of its own. Bank of America is coming off a better than expected second quarter, beating on both the top and bottom line by a considerable margin. Despite some weakness at the start of the year, it appears as if the financial sectors is poised to have an exceptional second half, BOA included.
Analysts at Estimize are calling for earnings per share of 35 cents, reflecting a 5 % decline on the bottom line. That estimate has increased 2% since the company’s most recent report. Given the recent earnings surprises from the banks, it wouldn’t be surprising if that trends higher leading into the report. Revenue for the period is estimated flat from a year earlier at $20.85 billion, reflecting a significant improvement from the previous two quarters. Shares have surged 20% in the past 3 months and strong beat on Monday could push that even higher.
Bank of America is in a strong position heading into its Monday report. The bank is expected to see improvement across the board from a bounce in trading activity, improving energy sector, and efficient cost controls. The market has been booming since Brexit and should pay off in the form of higher trading revenue and greater investment banking operations. Meanwhile, a bounce in the energy sector should alleviate loan losses for the quarter.
While it appear as everything is headed in the right direction, there remains a few near term headwinds. The surging U.S. dollar, ongoing news surrounding Brexit and persistently low interest rates will play an impact moving for the rest of the year. As more news comes out regarding Brexit, Bank of America, who has large exposure to Europe, will start to see additional pressure.
Disclosure: Each week, Forcerank runs a variety of games covering different industries. What we have found, is that the highest ranked companies in their ...
more