Close-up of sign with logo for the Bank of America branch in the Gourmet Ghetto (North Shattuck) ... [+]
Bank Of America is scheduled to report earnings before Friday’s open. The stock hit a record high of $55.08/share in 2006 and is currently trading near $33/share. The stock is prone to big moves after reporting earnings and can easily gap up if the numbers are strong. Conversely, if the numbers disappoint, the stock can easily gap down. To help you prepare, here is what the Street is expecting:
Earnings Preview
The company is expected to report a gain of $0.69/share on $21.71 billion in revenue. Meanwhile, the so-called Whisper number is a gain of $0.72/share. The Whisper number is the Street's unofficial view on earnings.
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A Closer Look At The Fundamentals
The company’s earnings have grown nicely over the last several years. In 2020, the company earned $1.87/share and in 2023 it is expected to earn $3.40/share. Sales and Earnings have both grown in each of the past four quarters on a year over year basis. Return on Equity (ROE) has been above 10% in each of the past four quarters which is a healthy sign. The price to earnings (P/E) ratio is only 9 which is below the S&P 500 and most of the market.
A Closer Look At The Technicals
Technically, the stock just had a big run. At the end of October the stock was trading near $25 and it was trading just below $35 last week! That is a big move for Bank of America’s stock. The stock is currently pulling back as it pauses to consolidate the big run it just had. The stock broke below its 21 day moving average line (green line above) and the next level to watch is the 50 DMA line (red line) near $31.
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. Its Consumer Banking segment offers traditional and money market savings accounts, certificates of deposit and IRAs, noninterest-and interest-bearing checking accounts, and investment accounts and products; and credit and debit cards, residential mortgages, and home equity loans, as well as direct and indirect loans, such as automotive, recreational vehicle, and consumer personal loans. The company's Global Wealth & Investment Management segment offers investment management, brokerage, banking, and trust and retirement products and services; and wealth management solutions, as well as customized solutions, including specialty asset management services. Its Global Banking segment provides lending products and services, including commercial loans, leases, commitment facilities, trade finance, and commercial real estate and asset-based lending; treasury solutions, such as treasury management, foreign exchange, and short-term investing options and merchant services; working capital management solutions; and debt and equity underwriting and distribution, and merger-related and other advisory services. The company's Global Markets segment offers market-making, financing, securities clearing, settlement, and custody services, as well as risk management products using interest rate, equity, credit, currency and commodity derivatives, foreign exchange, fixed-income, and mortgage-related products. The company was founded in 1784 and is based in Charlotte, North Carolina.
Pay Attention To How The Stock Reacts To The News
From where I sit, the most important trait I look for during earnings season is how the market and a specific company reacts to the news. Remember, always keep your losses small and never argue with the tape.
Disclaimer: The stock has been featured in my FindLeadingStocks.com stock market membership website.
