But it is still down about 25% year to date, at $33 as of July 19. As of Dec. 31, 2021, the S&P 500 index was yielding 1.29%, but Bank of America currently pays a 1.87% yield. Last year, the stock was down 11% while most of its banking peers fared far worse. Not too shabby. To screen for more stocks like Bank of America Corp click here. Let's take a closer look at the earnings numbers to see if the stock is a buy. Price as of December 9, 2022, 4:00 p.m. This means the stock is fairly priced at around $38.63 per share or possibly even slightly underpriced. This is a relatively low beta, meaning the stock is unlikely to make a significant move should the market soar or suffer a large drop. Making the world smarter, happier, and richer. Click Here to get the full Stock Report for Bank of America Corp stock. Buffetts annual letter to the shareholders of his company is an almost religious experience, popular among professionals and amateurs alike due to his history of investment success and his ability to explain complicated financial matters in simple, folksy terms. Bank of America pays a 2.5% dividend and is buying back gobs of stock. For a market-leading company with strong, consistent earnings power, this is a good valuation. Can Bank of America claw back and keep riding the larger economic wave rolling across the U.S. in late 2018? Rising interest rates should continue to boost net interest income, and as a bank that gets 40% of its revenue from consumer banking, it should help revenue, even if loan growth slows. While bank stocks are not high-flyers that command excessive P/E ratios, this puts Bank of America stock at a significant discount compared to the forward S&P 500 P/E ratio. You're all set to receive the Morning Update newsletter. It continues to be Berkshires second-largest equity holding valued at more than $33 billion . There are a lot of places to invest that $1,000, but there aren't many that will give you more bang for your buck than Bank of America. Bank of America Corp. (NYSE: BAC) comes from a rich Roman heritage, founded as Bank of Italy back in 1904. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. Price as of December 9, 2022, 4:00 p.m. BAC stock at a glance. If you dont own BAC, I would wait for a better entry point later in the year. Stock Price data may be delayed up to 15 minutes. Overall, BAC shares are up 1 percent in the past 52-week trading period, and the stock is trading below its 200-day moving average. Bank of America is an advertising partner of The Ascent, a Motley Fool company. And, in true Buffett fashion, those purchases have already proven to be big winners, as Bank of America traded at about $25 per share at the time of his 2020 purchases, marking a nearly 80% gain as of Jan. 21. That amount probably won't make you a millionaire any time soon, but the bank Other professional investors agree that, for now, keeping BAC at arm's length is a good idea. Fotheringham stated in a note to clients that BAC shares now trade at a premium to their long-term historical average.. Of course, sometimes the best endorsement Buffett can give a stock is in his trading activity. The stock price has jumped about 10% since last Friday, July 15, buoyed by positive market reaction to the earnings report. Fotheringham stated in a note to clients that BAC shares now trade at a premium to their long-term historical average.. Coupled with the pandemic shutting down most businesses, loan activity simultaneously dried up, making for a disastrous scenario for banks. Warren Buffett is a big booster of Bank of America stock. In October, Berkshire petitioned the Federal Reserve to be able to raise its stake above the 10% threshold. A total of 25 analysts have issued BAC recommendations. Article printed from InvestorPlace Media, https://investorplace.com/2020/01/bank-of-america-stock-buy-sell-or-hold/. Warren Buffett is one of the most successful investors of all time. This improvement and improvement in the economy allowed Bank of America to release $851 million in loan reserves it had set aside to offset credit losses, resulting in a 6% increase in book value per share of stock good news for stockholders. That may not seem like much, but in todays low-dividend world, it equates to about a 47% increase over the S&P 500s yield. Overall, BAC shares are up 1 percent in the past 52-week trading period, and the stock is trading below its 200-day moving average. But if. Since the 2008 recession, Bank of America has done an excellent job of becoming a leaner organization, which has led to reasonably robust net interest margins despite falling interest rates in 2019. This allows the bank to perform better than most of its peers through various market cycles. Banks are cyclical in that they tend to move in tandem with the GDP, as more people and businesses typically borrow and invest when the economy is good. With Bank of America stock spiraling downward, is there a decent buying opportunity with BAC? ET, Warren Buffett Owns a Lot of Stocks -- Here's the One I'm Most Excited About, 2 Bank Stocks to Buy Before the Bear Market Is Over, WhyBank of America Stock Was Falling Today, 3 Stocks You Can Buy Today to Take Advantage of Robust Consumer Spending. Please try again later. Meanwhile, the Federal Reserve, which had committed to keeping short-term interest rates low while the economy got its bearings following pandemic reopenings, will look to interest-rate hikes to control inflation. ", Additionally, Bank of America's losses have "been shielded by expense cutting rather than from any significant growth in revenues or profits," Schrage says. If youre looking for a stock that pays a solid dividend, Bank of America should catch your attention. On a total return basis over the past year, BAC stock has generated a 45.4% return. Portions of this content may be copyrighted by Fresh Brewed Media, Investors Observer, and/or O2 Media LLC. Bank stocks are near the middle of the risk spectrum. It continues to be Berkshires second-largest equity holding valued at more than. As for Bank of America, Handschuh is cautious, although there are slivers of light piercing October's gray clouds. You could opt for a few shares of a big-name tech company, or roll the dice on a speculative meme stock. Let's find out if this multinational investment bank and financial services specialist is worthy of your investing dollars at its current price. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. Dave Kovaleski has no position in any of the stocks mentioned. in English with a Specialization in Business from UCLA, John Csiszar worked in the financial services industry as a registered representative for 18 years. *Average returns of all recommendations since inception. Along the way, Csiszar earned both Certified Financial Planner and Registered Investment Adviser designations, in addition to being licensed as a life agent, while working for both a major Wall Street wirehouse and for his own investment advisory firm. For Bank of America stock specifically, will the stock correct through time or through price? If the consumer fades, BAC fades. Subscribe to our daily morning update newsletter and never miss out on the need-to-know market news, movements, and more. If the economy does fall into recession, will average loans contract or continue to grow? Possibly, but it's going to take some time to see robust returns. 2 Stocks Down 19% to 51% to Buy Right Now, Join Nearly 1 Million Premium Members And Get More In-Depth Stock Guidance and Research, Motley Fool Issues Rare All In Buy Alert, Copyright, Trademark and Patent Information. "Bank stock valuations have come down over the past month on concerns that the economy is late in the cycle and the impact that could potentially have on loan growth and credit costs in 2019 and 2020," says Michael Cronin, investment manager for U.S. equities at Aberdeen Standard Investments. Learn More. "The bank is well-run and has performed well since the 2008 financial crisis," he says. This has never rung more true than in 2022, when all five For Berkshire Hathaway chief Warren Buffett, the 2022 bear market was one big Black Friday sale -- and the Oracle of Omaha went on a shopping spree. Read the latest stock experts ratings for Bank of America. in the final three months of 2019, its best quarterly performance since 2016. Before you choose to buy, sell or hold Bank of America Corp stock, youll want to analyze how it has been graded. Here's the 1 Social Security Change in 2023 That's Going to Hurt the Worst. It continues to be Berkshires second-largest equity holding valued at more than $33 billion. Not too shabby. Bank of Americas above-average dividend yield and good valuation already make it worth taking a look at, but additional factors seem to be supporting the long-term growth of the companys share price. Bank of America was recommended as a Top Pick by on . However, I dont think you can underestimate the value of Buffetts endorsement. Part of that provision is related to exposure to Russian assets, but the huge release a year ago, post-pandemic, accounted for most of the difference in net income year over year. Furthermore, once the Biden Bucks government cash payments directly to consumers end, there will be heightened demand for loans, helping BAC shore up this weak point all the more. By comparison, the three Buffett-owned stocks I discussed in early December: JPMorgan (NYSE:JPM), Apple (NASDAQ:AAPL), and Costco (NASDAQ:COST) have one-year total returns of 45.4%, 92.1%, and 43.6%, respectively. Sign up for our daily newsletter for the latest financial news and trending topics. "Why the effect is being felt by Bank of America more than others isn't easily answered, other than the expense-cutting measures," he says. Consumers and businesses alike have been flooded with government stimulus money, and this has already been driving longer-term interest rates higher. Halted Stocks Alert: Why Did FINRA Halt MMTLP Stock? That means you want to buy stocks with a Zacks Rank #1 or #2, Strong Buy or Buy, which also has a Score of an A or a B in your personal trading style. Should You Buy the 5 Highest-Paying Dividend Stocks in the S&P 500? For anyone concerned about stock valuations getting ahead of themselves, an excellent option in 2020 might be to buy Berkshire Hathaway (NYSE:BRK.A, NYSE:BRK.B), so that you get a little piece of all four without as much company risk. Invest better with The Motley Fool. That depends on your view of the general economy for the year ahead. There is good news on the horizon. Friday, December 09, 2022 03:30 PM | InvestorsObserver Analysts, Friday, December 09, 2022 03:25 PM | InvestorsObserver Analysts, Friday, December 09, 2022 03:14 PM | InvestorsObserver Analysts, Friday, December 09, 2022 03:09 PM | InvestorsObserver Analysts, Friday, December 09, 2022 03:08 PM | InvestorsObserver Analysts, Friday, December 09, 2022 03:07 PM | InvestorsObserver Analysts, Tuesday, December 06, 2022 10:11 AM | InvestorsObserver Analysts. These changes have positioned BAC well in terms of operating costs, but might not be enough for a potential downturn in business activity due to rising rates and the outstanding geopolitical risks.". Investors received their most recent dividend payment on Dec. 2, 2021. BAC has a forward P/E ratio of 11.41. Looking at net income, it dropped year over year due to two primary factors. The bank generated $8.1 billion in net income, or $0.867 per share, in Q1. Portions of this content protected by US Patent numbers 7,865,496, 7,856,390, and 7,716,116. Unless you were playing the short side of the market, 2022 has been a pretty dismal year for investors across the board. After years of enduring a low-interest rate environment, the coronavirus pandemic hit the economy in 2020. BAC has a C POWR Ratings grade, indicating the stock is a Hold. Nasdaq If you invested $1,000 in Bank of America's stock right now, you could buy around 25 shares. During his time as an advisor, Csiszar managed over $100 million in client assets while providing individualized investment plans for hundreds of clients. Eventually, as the economy gets stronger, the Fed will raise interest rates and that will further help the bank. Portfolio results are unaudited and based on varying investment expiration dates. building in this country with defaults on those loans the highest theyve ever been. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. As for fundamentals and its actual business. Furthermore, BAC has been struggling to make loans in the current lending environment. *Average returns of all recommendations since inception. If Berkshire wasnt BACs largest shareholder and petitioning the Federal Reserve to keep it that way, I dont think you would have seen quite the same performance by the BAC stock price in the fourth quarter. October has been particularly painful for BAC shareholders, as the stock has fallen 7 percent in the last month. Regardless of your situation, the regular payments that dividend stocks provide can make planning your finances easier. Cons to buying BAC stock. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. The overall revenue increase was buoyed by a 12% year-over-year jump in revenue in the consumer banking business (its largest business segment) to $9.1 billion, and a 7% revenue increase in its wealth and investment management business to $5.4 billion. The stock's average analyst price target has jumped up to $11.29 in the past half-year. To make the world smarter, happier, and richer. "Due to the risk factors involved, I see the banking sector continuing to underperform the market average," he says. For anyone concerned about stock valuations getting ahead of themselves, an excellent option in 2020 might be to buy. What sets Bank of America apart from most of its competitors is its diversity of revenue, as it not only generates revenue from its consumer banking business, but also from its wealth and investment management, investment banking, and institutional trading and analytics arms. The post Should You Buy the Dip in Bank of America Stock? Bank stocks can be excellent long-term investment opportunities, but they aren't right for all investors. Of the 11 publicly traded companies in the Money Center Banks category, BAC is ranked 9th. ", "Inflation surge could push the Fed into more than four rate hikes this year, Goldman Sachs says. On top of that, the Biden administration is looking to pass a $2 trillion infrastructure bill, which would be a further boon to a large lender like Bank of America, In addition, Bank of America has positioned itself well as a leader in digital banking, a trend that will only continue to grow over the next decade. This is obviously something to keep an eye on over the next few quarters. "There are a few reasons to stay away from BAC," says Andrew Schrage, CEO of Money Crashers, an investment and personal finance digital platform. It has a price-to-earnings (P/E) ratio of about 17 and a forward P/E of 13, which are average, if not a little low, for the sector. 1125 N. Charles St, Baltimore, MD 21201. Net charge-offs increased 46% over the first quarter but are down 4% year over year to $571 million, with a ratio of 0.23%. Either way, Bank of America now has some major catalysts behind it. The Oracle of Omahas company owns 10.5% of its BAC stock. However, as my colleague Josh Enomoto recently stated, Bank of Americas bread-and-butter customer is the consumer, despite diversifying into wealth management and investment banking. The U.S. GDP is expected to grow 6% in 2021, which would be the highest annual growth rate since 1983. The analysts are bullish on BAC, setting an average target price of $43.67 per share. The Oracle of Omahas company owns 10.5% of its BAC stock. Find out when the NYSE is open and when it's not. as it did in the second half of last year, thats not going to be good for BAC or many other banks for that matter. Earlier in 2019, the odds got as high as 50% but have since fallen to 33%. Year-to-date, BAC has gained 27.32%, versus a 16.88% rise in the benchmark S&P 500 index during the same period. To make the world smarter, happier, and richer. Behind the strength, BAC was one of the days Our overall hedge fund sentiment score for BAC is Will You Be One of Them? This one-two punch decimated Bank of Americas loan business, which is the primary way banks make money. Bank of America is trading at $28 per share. One, Bank of America set aside $523 million as a provision for credit losses, after a net reserve release of $1.6 billion a year ago. "The factors impacting bank stocks are rising interest-rate environment, geopolitical trade risks, and a decline in mortgage originations and refinancings," says Ed Handschuh, a longtime financial advisor and now the CEO of 1Konto, a crypto brokerage firm trading across multiple exchanges. The company has posted strong results over the past year Finally, BMO Capital Markets analyst James Fotheringham downgraded BAC from outperform to market perform Jan. 3 solely based on its valuation. . Bank of America is pretty cheap right now, with a price-to-earnings ratio of about 10, down from 17 a year ago, and a price-to-book ratio right around 1, down from 1.7 a year ago. Bank of America Corp. (NYSE: BAC) comes from a rich Roman heritage, founded as Bank of Italy back in 1904. Going forward, BAC will probably follow the same path of other banking stocks, since a lot of the problems it faces are rampant throughout the industry, Schrage says. With fortunes seemingly changing in favor of the bank, this could be an attractive level for purchase for long-term value investors. 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"Chief Executive Officer Brian T. Moynihan has done a fantastic job modernizing the institution, cutting workforce, implementing artificial intelligence and digital strategies to streamline business units. ". "We currently own the stock on expectations for improved returns and continued strong positive operating leverage," he says. BAC has Cs in the Value, Growth, Momentum, and Sentiment components of the POWR Ratings. In the fourth quarter of 2021, loans grew by $51 billion. While investors would no doubt like to have bought Bank of America stock back when Buffett was loading up in midsummer 2020, the stock still appears to have some room left to run. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Quarterly revenues are expected to rise by 9.75 percent, to $22.4 billion. The good news for Bank of America is that things are slowly returning to normal. Bank of America Corporation (NYSE:BAC) is not the most popular stock in this group but hedge fund interest is still above average. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. As it continues to build out its team of regional bankers across the U.S., its loan business will continue to grow. This is double what it was a year ago, primarily because the bank was able to release some of its provision for credit losses, reflecting an improvement in credit quality and the overall economy. Cronin says that BAC is a "well-run company" and that management has done a good job of reducing costs and simplifying the bank by exiting non-core products and assets in past years. Investing in stocks, bonds, option and other financial instruments involve risks and may not be suitable for everyone. According to Statista, the NYSE lists the shares of 1,980 U.S.-based publicly traded companies. One of the driving forces for Bank of America is its leadership in digital banking. Its banking model was primarily geared to the middle-class, created as a financial institution to service the waves of immigrant families arriving in Northern California at the turn of the 20th century. Over the past 10 years, it has posted an annualized return of 14.7% through April 23, which beats both the S&P 500 and the overall financial sector. ", [See: 10 Reasons Warren Buffett Is a Better Investor Than You.]. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. Markets anticipate four 0.25% hikes this year, CNBC reported, but some analysts think the Fed could be even more aggressive than that. The Motley Fool has a disclosure policy. The bottom line is the market has plenty of better opportunities to put your money at work. Additionally, interest rate spreads are likely to increase, which is another catalyst for banks as a whole. I dont think given the current facts available that you should be a seller. Find out what this means for you and get the rest of the rankings on BAC! Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Back in the 90s, the talking heads on CNBC were adamant that a forward P/E ratio of 12 represented fair value. Those people are going to suffer further if we slide into a recession in 2020. arent all that high as we start the year. There are many Americans who are BAC customers that arent doing as well as the economic data would suggest. Perhaps the greatest evidence of Buffetts fondness for Bank of America was demonstrated in 2020 and 2021, when Buffett sold shares in numerous other financial holdings while bolstering his Bank of America investment. Overall, though, Handschuh remains bearish on banks. 2 Stocks Down 19% to 51% to Buy Right Now, Join Nearly 1 Million Premium Members And Get More In-Depth Stock Guidance and Research, Copyright, Trademark and Patent Information. Copyright 2022. Also, the bank lowered its efficiency ratio by 5 basis points to 54%, which means that it is spending less to earn a dollar of revenue. Americas slow recovery from the coronavirus pandemic should continue to unleash both consumer and business spending and loan activity. That amount probably won't make you a millionaire any time soon, but the bank should generate solid long-term growth, as it has for the past decade. Hertz announced on Dec. 5 it had settled 364 claims -- and would pay out $168 million -- following a lawsuit against the company. But in a low-interest-rate environment, theres not much of a spread between short- and long-term interest rates. Just be sure to talk with your investment advisor to ensure that a purchase of Bank of America shares matches your own personal investment objectives and risk tolerance. An oft-quoted Wall Street axiom claims that picking winning sectors is at least as important, if not more, than selecting individual stocks. Analysts certainly think that Bank of America has more room to run. The Nasdaq and the New York Stock Exchange are the two major stock exchanges in the United States. On a total return basis over the past year, BAC stock has generated a 45.4% return. Do Analysts Agree Friday on Provident Financial Services, Inc. (PFS) Stock's Target Price? On the other hand, Bank of Americas wide economic moat and improving fundamentals, as well as its cheap valuation, should allow investors to beat the equity market in Dave Kovaleski has no position in any of the stocks mentioned. 8 Bank Stocks to Buy for Trump's Next 2 Years, 7 Robo Advisors for Sophisticated Investors, 10 Reasons Warren Buffett Is a Better Investor Than You, 8 Great Stocks to Buy for the Third Quarter, One of the most frequently cited risks to stocks in 2023 is 'overstated', Twenty-seven men believed to be Ethiopian migrants found dead along road in Zambia, Idina Menzel on Broadway's 'revitalized' comeback: 'Everyone needs live theater', Economic weakness not showing up in leisure travel, Travel + Leisure CEO says, Some Russian soldiers in Ukraine unhappy with top brass - nationalist blogger. Should Asset Management Stock Kayne Anderson Energy Infrstctr Fund Inc (KYN) Be in Your Portfolio Friday? All Rights Reserved. Early in 2020, investors are wondering if BAC is a buy, sell, or hold. In 2018, however, bank stocks have largely underperformed against broader markets, and BAC is no exception, as financial institutions grapple with stronger digital competition, higher interest rates and an increasingly negative outlook on financial services in the next year or two. The other factor was higher expenses, up about 2% to $15.3 billion. Some savvy Wall Street insiders say, "don't bank on it.". Bank of America (BAC) Bank of America (BAC) is one of the countrys largest banks and offers investors exposure to Main Street and Wall Street. But if manufacturing continues to contract as it did in the second half of last year, thats not going to be good for BAC or many other banks for that matter. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. The stock market has a schedule and even closures. The company has posted strong results over the past year especially as default rates have been lower than expected which is leading to the company taking off some of its loan loss reserves. Also, nonperforming loans (loans in default) were down 10% in the quarter and 15% year over year, with a ratio of 0.41%. I believe that at some point in 2020, youll be able to buy BAC stock below $30. Since the 2008 recession, Bank of America has done an excellent job of becoming a leaner organization, which has led to reasonably robust net interest margins despite. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). Cost basis and return based on previous market day close. Is AXIS Capital Holdings Ltd (AXS) a Stock to Watch After Gaining 0.85% This Week? Coupled with decent earnings reports from Goldman Sachs on Monday and Citigroup last Friday, there has been some good momentum in the overall market the past few days. Millions of People Will Be Blindsided in 2023. ", He adds, "Unfortunately, I don't see the sector performance picking up until there is more clarity around rates and geopolitical issues.". Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. The company struggled during the financial crisis of 2007-08, and it ultimately had to cut its quarterly dividend to just $0.01 per share for its March 27, 2009, payout. The CEO of Berkshire Hathaway, Buffetts investment vehicle, has a net worth of $110.5 billion, which makes him the seventh-wealthiest person in the world, according to Forbes Real-Time Billionaires list. Both the U.S. and Bank of America survived the depression and, thanks in major part to its purchase of Merrill Lynch (purchased in 2009), Bank of America is one of the largest banks in the U.S. with $2.3 trillion in assets under management, second only to J.P. Morgan Chase & Co. ( JPM). Traditionally, the function of a bank is to take the money deposited by customers and lend it out to borrowers. Will your money be safe? Or you could invest that money in a market-leading company that's among the top performers in the S&P 500 this year. 1125 N. Charles St, Baltimore, MD 21201. That growth, coupled with increases in Consumer Banking (16%) and Global Wealth and Investment Management (20%) deposits, resulted in a $1.2 billion increase in net interest income compared to the fourth quarter of 2020. For a financial institution with nearly $3 trillion on its balance sheet, Bank of America sometimes gets lost in the shuffle. Heres a quick rundown on why many analysts and investors alike are backing the second-largest bank in the United States. "Also, BAC stock isn't free from the fallout from international business dealings, namely threatened tariffs on China. "Although the valuations are more attractive now, the market will likely need to gain comfort that economic growth is going to be stable or accelerate over that period before it gets excited about the group again. Shares trade at roughly 9 times earnings despite estimates calling for positive revenue and earnings If you invested $1,000 in Bank of America's stock right now, you could buy around 25 shares. These offers do not represent all available deposit, investment, loan or credit products. While investors would no doubt like to have bought Bank of America stock back when Buffett was loading up in midsummer 2020, the Pros to buying BAC stock. Invesco Senior Income Trust (VVR) Stock Falls -1.29% This Week: Is It a Good Pick. The stock has This year, the stock is up roughly 30%. ", [See: 8 Great Stocks to Buy for the Third Quarter.]. Bank of America is one of the biggest names in banking -- the second-biggest, in fact, with $3 trillion in assets under management as of March 31, behind only JPMorgan Chase. However, since then the dividend has grown by a factor of 21, to $0.21 per share every quarter. Heres Why. Click here to find out more about the publicly traded companies in this segment. But let's take a closer look at Bank of America's earnings to see what it means longer term. Michael Bloom. In early December, I wrote about three Buffett-owned stocks that had outperformed Bank of America (NYSE:BAC) on a year-to-date basis. 4 Social Security Changes Joe Biden Wants to Make: Is 2023 the Year They Become Reality? The increase in provisions for credit losses is concerning, especially with inflation rising and a possible recession looming. Here are Fridays biggest analyst calls: Apple, Tesla, McDonalds, Netflix, Carvana, Microsoft & more. The Motley Fool has no position in any of the stocks mentioned. These offers do not represent all available deposit, investment, loan or credit products. As it continues to build out its team of regional bankers across the U.S., its loan business will continue to grow. Bank of America is one of the countrys largest banks and offers investors exposure to Main Street and Wall Street. In my opinion, the banks stock is a hold. If its the former, BAC will largely consolidate its recent gains as it trades sideways. The other metric to watch is loan activity. JPM, WFC and GS stock finished up on either side of 2.5%. Bank of America Stock: Buy, Sell or Hold? So, if you own Bank of America stock and believe Warren Buffett is right about the bank, you ought to put some cash aside to buy more at a better entry point. Stock evaluation requires access to huge amounts of data and After all, Berkshire is a diversified mutual fund in disguise. Editorial Note: This content is not provided by any entity covered in this article. BANK OF AMERICA: Buy these 13 high returning, high-yielding stocks because they should hold up best as a slowing economy slips into recession Marley Jay 2022-12 2022 GOBankingRates. Bank of America took the lead with its standout gain of 3.3%. Is Bank of America a good investment or a top pick? Advertiser Disclosure: Many of the offers appearing on this site are from advertisers from which this website receives compensation for being listed here. BAC is unworthy of your hard-earned investing dollars at its current price point. The P/E for the S&P 500 index as a whole is 27.24, according to The Wall Street Journal. BAC stock had a lackluster year in 2018, with share prices down 6 percent on a year-to-date basis compared to a gain nearly 2 percent of the S&P 500 index. How Will the Market React to Sprott Physical Gold and Silver Trust (CEF) Stock Getting a Bullish Rating. Bank of America might not be the most exciting stock on Wall Street, but if you want to make money over the long run and believe in the bets made by the Oracle of Omaha himself, famed billionaire Warren Buffett then it might be just what youre looking for. Our in-house research team and on-site financial experts work together to create content thats accurate, impartial, and up to date. If BAC hits this level, it will have increased by more than 7%. The price-to-book ratio is also fairly low, at around 1.4. As we emerge from the recession, economic conditions are improving, and that's great news for Bank of America. However, faltering loan growth appears to be a major investor concern even though the company surpassed expectations of 77 cents per share in the second quarter, raking in earnings of $1.03 per share. Best Artificial Intelligence Stocks: 7 Picks To Buy and Watch Now, Best Penny Stocks To Buy: Find the Best Ones To Watch, How Investing a Little Each Paycheck Goes a Long Way, 9 Christmas Stocks To Invest In This Holiday Season. It is also interesting not to note BAC has a beta of 1.54. The Motley Fool has a disclosure policy. Bank of America saw revenue climb 6%, spurred by a sharp increase in net interest income. Though the company surpassed estimates for second-quarter earnings, its revenue was somewhat disappointing. Bank of America Corp (BAC) stock is trading at $33.51 as of 10:08 AM on Tuesday, Dec 6, a drop of -$0.96, or -2.79% from the previous closing price of $34.47. The company delivered strong earnings but underwhelmed in terms of its outlook due to weak loan demand and compression in the spread between short and long-term rates. October has been particularly painful for In the month since that article, Bank of America stock has gained more than 7%, putting its 2019 gains at 44%. Bank of America Corp has a Bearish sentiment reading. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article. Daria Uhlig contributed to the reporting for this article. Investors who are curious as to how BAC fares in the rest of the POWR Ratings components such as Quality and Stability can find out by clicking here. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. That rolled out as struggling Americans were looking for financial help as the Great Depression raged throughout the country. Can BAC bounce back after its recent slide? Should You Buy the 5 Highest-Paying Dividend Stocks in the S&P 500? Bank of America Corp (BAC) stock is down 9.43% over the past week and gets a Bearish rating from InvestorsObserver Sentiment Indicator. Buy Bank of America Bank of America and Citigroup are two of the largest banks in the world, so rest assured that the government is not likely to let either fail and both have In early December, I wrote about three Buffett-owned stocks that had outperformed. The median consensus estimate among analysts calls for the stock price to rise another 10% this year, with some predicting a move to as high as $50 per share over the next 12 months. It wasn't until 1930 that the bank hung a new shingle outside its branches, thus launching the prominent Bank of America brand. Bank of Americas current price-earnings ratio is 12.58x, which is in line with its estimated forward P/E ratio of 14.59. Banks, in general, should perform well in this rising-rate period, as long as the economy does not go into a deep or long recession -- a big if, but one to consider. Earlier in 2019, the odds got as high as 50% but have since fallen to 33%. overall in the latest quarter with a 7% boost in commercial loans. Data is accurate as of Jan. 21, 2022, unless otherwise noted, and subject to change. Invest better with The Motley Fool. If you dont own BAC, I would wait for a better entry point later in the year. There was an unknown error. Early in 2020, investors are wondering if BAC is a buy, sell, or hold. Bank of America certainly seems to have the green light from Buffett, as its Berkshire Hathaways largest bank investment by far. Copyright to be able to raise its stake above the 10% threshold. Myriad impactors -- most of them negative -- appear to be standing in the way of Bank of America share growth. FINRA Halts Trading in Meta Materials (MMTLP) Stock Ahead of Spinoff. For these reasons, Bank of America looks like a decent buy right now. It generated $22.8 billion in revenue in the first quarter, up 13% from the same period in 2020 but, more important, back to its levels from the first quarter of 2019, before the pandemic. All rights reserved. Part of the reason why BAC has been sliding is the fact that the current environment is not optimal for lenders. Some good signs for Bank of America, the nation's second-largest bank, are a 3% year-over-year increase in average loans and a 22% jump in net interest income to $12.4 billion. Consensus analyst expectations peg the bank's one-year share performance stock at $34 per share, at the top of the stock's 52-week trading range of $26-to-$33 per share. Citigroup is an advertising partner of The Ascent, a Motley Fool company. Josh goes on to suggest that theres a potential auto loan crisis building in this country with defaults on those loans the highest theyve ever been. On its next earnings release, on Jan. 16, Bank of America is expected to report earnings of 65 cents per share, a year-over-year uptick of 38.3 percent, according to Zacks Investment Research. To buy the Dip or not buy the dip, That is the Question? "A top one is the current plight of the housing market, where there just aren't a lot of homes available -- fewer new mortgages means fewer profits. Thank you for signing up! In 2022, it is projected to grow another 3.5% on top of that. Though the lending market is certainly concerning, it is only a matter of time until small businesses and consumers begin piling on the debt as they did before the pandemic. Despite the stock's gains this year, it's stilla great value. Should you buy Bank of America (BAC) on the dip?. However, they remain solid long-term buys. Terms of Service | Privacy Policy. BAC's forward annual dividend yield stands at 2.1 percent. Cost basis and return based on previous market day close. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). To top it all off, one of the most successful investors in the world owns 12.6% of the outstanding shares of Bank of America, meaning those who buy the stock now are in good company. Furthermore, the banks making great strides with digital banking, which could provide higher retention of customers, in good times and bad. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Bank stocks have been under pressure due to the flattening of the yield curve and underwhelming growth in loan demand. The Motley Fool has positions in and recommends Goldman Sachs. In fact, its currently Buffetts largest holding overall, with over a billion shares owned at a current value of nearly $46.4 billion, according to the companys September 2021 and November 2021 13F filings, as analyzed by CNBC. These are some of the best monthly dividend stocks. BAC shares fell $0.20 (-0.52%) in premarket trading Thursday. The bottom line is this when Buffett talks, people listen.
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