Bank of America (NYSE:BAC) Stock Falls 1.7% – What’s Next?

Bank of America Corporation (NYSE:BAC)’s share price dropped 1.7% during mid-day trading on Monday. The company traded as low as $50.20 and last traded at $50.3750. 42,364,122 shares were traded during trading, an increase of 12% from the average daily volume of 37,799,344 shares. The stock had previously closed at $51.23.

Key Stories Impacting Bank of America

Here are the key news stories impacting Bank of America this week:

• Positive Sentiment: Some analysts view the sell-off as an opportunity, arguing that Bank of America’s underlying profitability and strong balance sheet remain intact. Morgan Stanley reportedly sees the stock as de-risked and estimates meaningful upside if management executes. Bank of America Stock Is a Buy after the Recent Sell-Off Bank of America’s bad news may not be what investors think
• Neutral Sentiment: Bank of America analysts continue to expect a Federal Reserve rate increase in October. Higher rates could support bank margins, but the outlook also raises concerns about economic growth and credit quality. Why BofA still sees an October Fed rate hike
• Neutral Sentiment: Bank of America disclosed that its indirect stake in Turkish venture investment firm ICU Girisim Sermayesi reached 4.1%, a relatively small portfolio development with limited near-term effect on BAC earnings. Bank of America lifts indirect stake in ICU
• Negative Sentiment: A $1.2 billion regulatory penalty tied to anti-money-laundering violations is weighing on sentiment, highlighting compliance costs and potential reputational damage. CEO Brian Moynihan said the bank is addressing the problem, but investors remain focused on execution.
• Negative Sentiment: Freedom Broker lowered its BAC price target to $63 from $70, while technical analysis warned that the post-earnings decline below a key trend line could signal a deeper correction. Bank of America price target lowered Bank of America Stock Breaks Key Trend Line
• Negative Sentiment: Several law firms announced investigations or class actions alleging securities-law violations and misleading disclosures related to the bank’s compliance issues and stock decline. These claims could increase legal costs and prolong investor uncertainty, although no wrongdoing has been established. Bank of America securities class action Hagens Berman investigation

Analyst Upgrades and Downgrades

BAC has been the subject of a number of recent analyst reports. Keefe, Bruyette & Woods decreased their price target on Bank of America from $70.00 to $65.00 and set an “outperform” rating for the company in a research report on Thursday. Oppenheimer cut Bank of America from an “outperform” rating to a “market perform” rating in a research note on Tuesday, June 30th. Morgan Stanley cut their price objective on Bank of America from $67.00 to $61.00 and set an “overweight” rating on the stock in a report on Thursday. Wells Fargo & Company cut their price objective on Bank of America from $69.00 to $64.00 and set an “overweight” rating on the stock in a report on Thursday. Finally, Jefferies Financial Group reduced their price objective on shares of Bank of America from $75.00 to $70.00 and set a “buy” rating for the company in a research note on Thursday, September 24th. Twenty investment analysts have rated the stock with a Buy rating and six have issued a Hold rating to the company’s stock. According to data from MarketBeat.com, the company currently has a consensus rating of “Moderate Buy” and an average target price of $62.52.

Bank of America Stock Down 1.7%

The business’s 50 day moving average is $59.05 and its 200 day moving average is $56.75. The company has a debt-to-equity ratio of 1.17, a quick ratio of 0.82 and a current ratio of 0.82. The stock has a market cap of $352.26 billion, a price-to-earnings ratio of 11.97, a price-to-earnings-growth ratio of 0.87 and a beta of 1.21.

Bank of America (NYSE:BAC) last posted its quarterly earnings data on Wednesday, October 14th. The financial services provider reported $1.08 earnings per share for the quarter, missing the consensus estimate of $1.10 by ($0.02). Bank of America had a return on equity of 12.15% and a net margin of 16.80%. The firm had revenue of $29.96 billion for the quarter, compared to analysts’ expectations of $30.58 billion. During the same quarter in the previous year, the firm posted $1.06 earnings per share. The company’s revenue for the quarter was up 3.2% on a year-over-year basis. Equities analysts expect that Bank of America Corporation will post 4.54 earnings per share for the current year.

Bank of America Increases Dividend

The firm also recently announced a quarterly dividend, which was paid on Friday, September 25th. Stockholders of record on Friday, September 4th were given a $0.32 dividend. This represents a $1.28 annualized dividend and a dividend yield of 2.5%. This is a boost from Bank of America’s previous quarterly dividend of $0.28. The ex-dividend date of this dividend was Friday, September 4th. Bank of America’s payout ratio is 30.40%.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently modified their holdings of BAC. Turim 21 Investimentos Ltda. purchased a new position in Bank of America during the 2nd quarter valued at about $25,000. Cherry Tree Wealth Management LLC increased its holdings in shares of Bank of America by 167.6% in the 2nd quarter. Cherry Tree Wealth Management LLC now owns 479 shares of the financial services provider’s stock valued at $27,000 after purchasing an additional 300 shares during the period. Principia Wealth Advisory LLC increased its holdings in shares of Bank of America by 69.9% in the 2nd quarter. Principia Wealth Advisory LLC now owns 530 shares of the financial services provider’s stock valued at $30,000 after purchasing an additional 218 shares during the period. Frazier Financial Advisors LLC purchased a new stake in shares of Bank of America in the second quarter worth approximately $34,000. Finally, Vermillion Wealth Management Inc. lifted its position in shares of Bank of America by 199.1% in the first quarter. Vermillion Wealth Management Inc. now owns 658 shares of the financial services provider’s stock worth $32,000 after purchasing an additional 438 shares in the last quarter. Hedge funds and other institutional investors own 70.71% of the company’s stock.

About Bank of America

Bank of America Corporation (NYSE: BAC) is a diversified financial services company headquartered in Charlotte, North Carolina. It provides banking, lending, investment, payments and financial management services to consumers, businesses, institutional investors and governments.

The company’s consumer banking operations offer checking and savings accounts, credit cards, mortgages, home equity lending, auto loans and other consumer financial products. Through Merrill, Bank of America provides wealth management, investment advisory, brokerage and retirement services.