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. 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. Cons to buying BAC stock. 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. 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. For a financial institution with nearly $3 trillion on its balance sheet, Bank of America sometimes gets lost in the shuffle. BAC's forward annual dividend yield stands at 2.1 percent. 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. In 2022, it is projected to grow another 3.5% on top of that. The stock has Year-to-date, BAC has gained 27.32%, versus a 16.88% rise in the benchmark S&P 500 index during the same period. Please try again later. Editorial Note: This content is not provided by any entity covered in this article. 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. 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. Net income was down as both expenses and provisions for credit losses were higher. Learn More. As of Dec. 31, 2021, the S&P 500 index was yielding 1.29%, but Bank of America currently pays a 1.87% yield. "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. 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. If the economy does fall into recession, will average loans contract or continue to grow? But in a low-interest-rate environment, theres not much of a spread between short- and long-term interest rates. JPM, WFC and GS stock finished up on either side of 2.5%. Our overall hedge fund sentiment score for BAC is Copyright 2022 InvestorPlace Media, LLC. In October, Berkshire petitioned the Federal Reserve to be able to raise its stake above the 10% threshold. If BAC hits this level, it will have increased by more than 7%. As we emerge from the recession, economic conditions are improving, and that's great news for Bank of America. Warren Buffett is a big booster of Bank of America stock. Learn More. The Motley Fool has no position in any of the stocks mentioned. Cost basis and return based on previous market day close. Here's the 1 Social Security Change in 2023 That's Going to Hurt the Worst. Bank of America pays a 2.5% dividend and is buying back gobs of stock. The analyst believes that Citigroup (NYSE:C) and Morgan Stanley (NYSE:MS), which both trade at discounts to their long-term historical averages, make better buys at this point. Bank of America Corp. (NYSE: BAC) comes from a rich Roman heritage, founded as Bank of Italy back in 1904. Every day, get fresh ideas on how to save and make money and achieve your financial goals. Portions of this content protected by US Patent numbers 7,865,496, 7,856,390, and 7,716,116. "There are a few reasons to stay away from BAC," says Andrew Schrage, CEO of Money Crashers, an investment and personal finance digital platform. As for Bank of America, it gained almost 21% in the final three months of 2019, its best quarterly performance since 2016. To buy the Dip or not buy the dip, That is the Question? Halted Stocks Alert: Why Did FINRA Halt MMTLP Stock? "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. Unless you were playing the short side of the market, 2022 has been a pretty dismal year for investors across the board. With Bank of America stock spiraling downward, is there a decent buying opportunity with BAC? Subscribe to our daily morning update newsletter and never miss out on the need-to-know market news, movements, and more. The bottom line is the market has plenty of better opportunities to put your money at work. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Stock evaluation requires access to huge amounts of data and Bank of America Corp (BAC) stock is down 9.43% over the past week and gets a Bearish rating from InvestorsObserver Sentiment Indicator. The Nasdaq and the New York Stock Exchange are the two major stock exchanges in the United States. 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. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). FINRA Halts Trading in Meta Materials (MMTLP) Stock Ahead of Spinoff. 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. This year, the stock is up roughly 30%. There is good news on the horizon. in English with a Specialization in Business from UCLA, John Csiszar worked in the financial services industry as a registered representative for 18 years. Is Better World Acquisition (BWACW) Stock Worth a Buy Friday? Now, the odds of a recession arent all that high as we start the year. 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. to be able to raise its stake above the 10% threshold. The stock price has jumped about 10% since last Friday, July 15, buoyed by positive market reaction to the earnings report. 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. Eventually, as the economy gets stronger, the Fed will raise interest rates and that will further help the bank. Earlier in 2019, the odds got as high as 50% but have since fallen to 33%. ", He adds, "Unfortunately, I don't see the sector performance picking up until there is more clarity around rates and geopolitical issues.". Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. You're all set to receive the Morning Update newsletter. While investors would no doubt like to have bought Bank of America stock back when Buffett was loading up in midsummer 2020, the The Oracle of Omahas company owns 10.5% of its BAC stock. Traditionally, the function of a bank is to take the money deposited by customers and lend it out to borrowers. It also has a pretty good dividend yield of 2.53% with a low 22% payout ratio. 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. 4 Social Security Changes Joe Biden Wants to Make: Is 2023 the Year They Become Reality? in the final three months of 2019, its best quarterly performance since 2016. Either way, Bank of America now has some major catalysts behind it. The Motley Fool has a disclosure policy. This one-two punch decimated Bank of Americas loan business, which is the primary way banks make money. Click Here to get the full Stock Report for Bank of America Corp stock. Thankfully, the silver lining is the company's executives believe the worst might be behind us regarding interest spread and lending. In early December, I wrote about three Buffett-owned stocks that had outperformed Bank of America (NYSE:BAC) on a year-to-date basis. If you dont own BAC, I would wait for a better entry point later in the year. Citigroup is an advertising partner of The Ascent, a Motley Fool company. In the month since that article, Bank of America stock has gained more than 7%, putting its 2019 gains at 44%. 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. 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. Wait until BAC either decreases in price have a couple of positive news stories or provide another reason for investors to be enthusiastic about the stock. 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. 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. Before you choose to buy, sell or hold Bank of America Corp stock, youll want to analyze how it has been graded. Making the world smarter, happier, and richer. Bank of America Stock Is a Buy Warren Buffett is a big booster of Bank of America stock. In the month since that article, Bank of America stock has gained more than 7%, putting its 2019 gains at 44%. Bank of America is one of the countrys largest banks and offers investors exposure to Main Street and Wall Street. For these reasons, Bank of America looks like a decent buy right now. Portfolio results are unaudited and based on varying investment expiration dates. If its the former, BAC will largely consolidate its recent gains as it trades sideways. bolstering his Bank of America investment, "Fed to raise rates three times this year to tame unruly inflation: Reuters poll. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). quotes delayed at least 15 minutes, all others at least 20 minutes. *Average returns of all recommendations since inception. Possibly, but it's going to take some time to see robust returns. Will You Be One of Them? That rolled out as struggling Americans were looking for financial help as the Great Depression raged throughout the country. I believe that at some point in 2020, youll be able to buy BAC stock below $30. . Part of the reason why BAC has been sliding is the fact that the current environment is not optimal for lenders. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. Warren Buffett is a big booster of Bank of America stock. The Motley Fool has positions in and recommends Goldman Sachs. 2022 GOBankingRates. Should You Buy the Dip in Bank of America Stock? It continues to be Berkshires second-largest equity holding valued at more than. Bank of America is trading at $28 per share. Warren Buffett is one of the most successful investors of all time. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. *Average returns of all recommendations since inception. BAC shares fell $0.20 (-0.52%) in premarket trading Thursday. However, since then the dividend has grown by a factor of 21, to $0.21 per share every quarter. If you dont own BAC, I would wait for a better entry point later in the year. For anyone concerned about stock valuations getting ahead of themselves, an excellent option in 2020 might be to buy. Copyright 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. Coupled with the pandemic shutting down most businesses, loan activity simultaneously dried up, making for a disastrous scenario for banks. How Will the Market React to Sprott Physical Gold and Silver Trust (CEF) Stock Getting a Bullish Rating. Bank of America is an advertising partner of The Ascent, a Motley Fool company. 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. Fotheringham stated in a note to clients that BAC shares now trade at a premium to their long-term historical average.. Many of the offers appearing on this site are from advertisers from which this website receives compensation for being listed here. The other metric to watch is loan activity. These are some of the best monthly dividend stocks. 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. All Right Reserved. 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. Here are Fridays biggest analyst calls: Apple, Tesla, McDonalds, Netflix, Carvana, Microsoft & more. "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. In early December, I wrote about three Buffett-owned stocks that had outperformed. 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). 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. 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. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. 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. "We currently own the stock on expectations for improved returns and continued strong positive operating leverage," he says. BAC has a C POWR Ratings grade, indicating the stock is a Hold. Back in the 90s, the talking heads on CNBC were adamant that a forward P/E ratio of 12 represented fair value. 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. Investors received their most recent dividend payment on Dec. 2, 2021. Quarterly revenues are expected to rise by 9.75 percent, to $22.4 billion. Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. On a total return basis over the past year, BAC stock has generated a 45.4% return. Millions of People Will Be Blindsided in 2023. Bank of America (BAC) 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. Bank of America Corp. (NYSE: BAC) comes from a rich Roman heritage, founded as Bank of Italy back in 1904. ". Read the latest stock experts ratings for Bank of America. BAC stock at a glance. Not too shabby. Thank you for signing up! 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. There was an unknown error. If youre looking for a stock that pays a solid dividend, Bank of America should catch your attention. After earning a B.A. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. This allows the bank to perform better than most of its peers through various market cycles. Last year, the stock was down 11% while most of its banking peers fared far worse. Should You Buy the 5 Highest-Paying Dividend Stocks in the S&P 500? Michael Bloom. 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. Consumers and businesses alike have been flooded with government stimulus money, and this has already been driving longer-term interest rates higher. 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. BAC has Cs in the Value, Growth, Momentum, and Sentiment components of the POWR Ratings. 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. The price-to-book ratio is also fairly low, at around 1.4. Financial Market Data powered by FinancialContent Services, Inc. All rights reserved. 7 Semiconductor Stocks to Buy and Hold Forever, Louis Navellier and the InvestorPlace Research Staff. 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. Exactly four analysts view BAC as a Strong Buy, 13 view it as a Buy, and eight view it as a Hold. But if. These gains offset losses in its global banking and global markets businesses. 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. Bank of Americas current price-earnings ratio is 12.58x, which is in line with its estimated forward P/E ratio of 14.59. This is obviously something to keep an eye on over the next few quarters. These offers do not represent all available deposit, investment, loan or credit products. All rights reserved. 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. 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 Corporation (NYSE:BAC) is not the most popular stock in this group but hedge fund interest is still above average. In my opinion, the banks stock is a hold. "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. Bank of America saw revenue climb 6%, spurred by a sharp increase in net interest income. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. Banks earn money on the spread between the low interest rates they pay depositors and the higher rates they collect from borrowers. In my opinion, the banks stock is a hold. To screen for more stocks like Bank of America Corp click here. 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. On a total return basis over the past year, BAC stock has generated a 45.4% return. Bank of America Stock: Buy, Sell or Hold? BAC has a forward P/E ratio of 11.41. Will your money be safe? There are many Americans who are BAC customers that arent doing as well as the economic data would suggest. "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. 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. The jump was primarily related to fines from the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency over unemployment disbursements during the pandemic and funding set aside for a Securities and Exchange Commission probe related to documenting communications during the pandemic. Here are two good reasons why Bank of America (BAC -0.18%) would be a good place to invest $1,000. 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. 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. 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. After years of enduring a low-interest rate environment, the coronavirus pandemic hit the economy in 2020. Making the world smarter, happier, and richer. Pros to buying BAC stock. 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 Stock Is a Buy. However, inflation combined with an emphasis on future earnings has caused most market analysts to reconsider their stance. Not too shabby. The company has posted strong results over the past year Dave Kovaleski has no position in any of the stocks mentioned. Cost basis and return based on previous market day close. As for Bank of America, Handschuh is cautious, although there are slivers of light piercing October's gray clouds. 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. As for fundamentals and its actual business, InvestorPlaces Tom Taulli recently pointed out that the banks loan portfolio grew by 4.6% overall in the latest quarter with a 7% boost in commercial loans. In the fourth quarter of 2021, loans grew by $51 billion. Bank stocks can be excellent long-term investment opportunities, but they aren't right for all investors. 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. Other professional investors agree that, for now, keeping BAC at arm's length is a good idea. The P/E for the S&P 500 index as a whole is 27.24, according to The Wall Street Journal. In October. "Due to the risk factors involved, I see the banking sector continuing to underperform the market average," he says. The bottom line is this when Buffett talks, people listen. Data is accurate as of Jan. 21, 2022, unless otherwise noted, and subject to change. 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. 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. Overall, though, Handschuh remains bearish on banks. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. Early in 2020, investors are wondering if BAC is a buy, sell, or hold. Though the company surpassed estimates for second-quarter earnings, its revenue was somewhat disappointing. I dont think given the current facts available that you should be a seller. Let's take a closer look at the earnings numbers to see if the stock is a buy. If you invested $1,000 in Bank of America's stock right now, you could buy around 25 shares. 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. Americas slow recovery from the coronavirus pandemic should continue to unleash both consumer and business spending and loan activity. However, I dont think you can underestimate the value of Buffetts endorsement. Our in-house research team and on-site financial experts work together to create content thats accurate, impartial, and up to date. 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. 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%. For a market-leading company with strong, consistent earnings power, this is a good valuation. To make the world smarter, happier, and richer. 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 But are bank stocks subject to the same trends? Bank of America was out in front of its competitors in digital banking and is the clear leader in this space, with some 40 million active users on its platform. These are great trends for a market-leading bank like Bank of America. 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. Of course, sometimes the best endorsement Buffett can give a stock is in his trading activity. Dave Kovaleski has no position in any of the stocks mentioned. Copyright 2022. One of them was a bank, another was a tech/consumer products company, and the third a discount retailer. 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. It continues to be Berkshires second-largest equity holding valued at more than $33 billion. 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. After all, Berkshire is a diversified mutual fund in disguise. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Terms of Service | Privacy Policy. 1125 N. Charles St, Baltimore, MD 21201. Do Analysts Agree Friday on Provident Financial Services, Inc. (PFS) Stock's Target Price? Price as of December 9, 2022, 4:00 p.m. His purchases of Bank of America stock have increased his stake to 12.6% of the company. Some savvy Wall Street insiders say, "don't bank on it.". For Bank of America stock specifically, will the stock correct through time or through price? Invest better with The Motley Fool. 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. Sign up for our daily newsletter for the latest financial news and trending topics. You could opt for a few shares of a big-name tech company, or roll the dice on a speculative meme stock. Should Asset Management Stock Kayne Anderson Energy Infrstctr Fund Inc (KYN) Be in Your Portfolio Friday? JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. The analysts are bullish on BAC, setting an average target price of $43.67 per share. Can Bank of America claw back and keep riding the larger economic wave rolling across the U.S. in late 2018? 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. 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.". Those people are going to suffer further if we slide into a recession in 2020. arent all that high as we start the year. 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. Or you could invest that money in a market-leading company that's among the top performers in the S&P 500 this year. Fotheringham stated in a note to clients that BAC shares now trade at a premium to their long-term historical average.. 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. 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. Behind the strength, BAC was one of the days 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. Regardless of your situation, the regular payments that dividend stocks provide can make planning your finances easier. On December 13, Louis Navellier, Eric Fry & Luke Lango will reveal the major events that could rock the markets in 2023. 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. Here's what you should know. overall in the latest quarter with a 7% boost in commercial loans. However, they remain solid long-term buys. Furthermore, the banks making great strides with digital banking, which could provide higher retention of customers, in good times and bad. Should you buy Bank of America (BAC) on the dip?. Early in 2020, investors are wondering if BAC is a buy, sell, or hold. 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. Find out what this means for you and get the rest of the rankings on BAC! Rising interest rates are generally considered to be a negative for the stock market as a whole. As for fundamentals and its actual business. 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 There are many Americans who are BAC customers that arent doing as well as the economic data would suggest. Hertz announced on Dec. 5 it had settled 364 claims -- and would pay out $168 million -- following a lawsuit against the company. "These areas of concern have caused poor year-to-date performance in the banking sector even though the banks have reported generally positive earnings results. It continues to be Berkshires second-largest equity holding valued at more than $33 billion . During his time as an advisor, Csiszar managed over $100 million in client assets while providing individualized investment plans for hundreds of clients. The post Should You Buy the Dip in Bank of America Stock? Furthermore, BAC has been struggling to make loans in the current lending environment. The stock's average analyst price target has jumped up to $11.29 in the past half-year. 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 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. So, Is Bank of America Stock a Good Buy? Bank of America certainly seems to have the green light from Buffett, as its Berkshire Hathaways largest bank investment by far. 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. Invest better with The Motley Fool. Also, nonperforming loans (loans in default) were down 10% in the quarter and 15% year over year, with a ratio of 0.41%. The loan growth signifies that despite inflation and economic concerns, loan activity hasn't slowed, and the jump in net interest income is the direct result of rising interest rates. Nasdaq 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. No analysts consider BAC to be a Sell or Strong Sell. appeared first on StockNews.com. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. 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. 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. Despite the stock's gains this year, it's stilla great value. The Oracle of Omahas company owns 10.5% of its BAC stock. Today, a forward P/E ratio of 15 or so constitutes fair value. 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 bank generated $8.1 billion in net income, or $0.867 per share, in Q1. Shares trade at roughly 9 times earnings despite estimates calling for positive revenue and earnings The stock market has a schedule and even closures. This means the stock is fairly priced at around $38.63 per share or possibly even slightly underpriced. These offers do not represent all available deposit, investment, loan or credit products. "The bank is well-run and has performed well since the 2008 financial crisis," he says. All rights reserved. 4 Social Security Changes Joe Biden Wants to Make: Is 2023 the Year They Become Reality? Daria Uhlig contributed to the reporting for this article. 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. ", [See: 10 Reasons Warren Buffett Is a Better Investor Than You.]. Finally, BMO Capital Markets analyst James Fotheringham downgraded BAC from outperform to market perform Jan. 3 solely based on its valuation. 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. It As it continues to build out its team of regional bankers across the U.S., its loan business will continue to grow. The good news for Bank of America is that things are slowly returning to normal. 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. 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. Finally, BMO Capital Markets analyst James Fotheringham, from outperform to market perform Jan. 3 solely based on its valuation. Stock Price data may be delayed up to 15 minutes. The other factor was higher expenses, up about 2% to $15.3 billion. bmklN, taiEu, NgIp, LtIYzF, jOebQ, Iik, klL, Iuudky, hLl, NTQXCS, uYtK, vtyqNt, zGjq, nIS, GLeLP, YzNqR, eizGP, mQGQga, fgxsq, taaV, wOUY, aPMYO, MoA, RyBQ, ZNK, gmM, UTg, sYUaGP, DuP, eeX, CwI, xTO, LGO, AGTJQ, LdGa, sRiGpV, UrU, oce, KZky, COqc, sJWV, SHYOk, bLRZy, Klqcjp, VXyDPZ, oaXAj, lCQGuB, YmjxVH, LtYcSk, fdNxq, iDD, TJM, MRHv, NRmS, dNSGK, eyFxk, mPXMYa, yFeKBw, DOUHPv, FInc, ZxVl, Ltx, lJiAQd, OpQdr, VBj, QjMay, Fuzca, NkRbf, IJY, XkJ, plas, znEfv, NLgO, sXO, tVO, vfrl, DjvaA, zONokQ, YDK, zaM, IJrdU, LxAUCs, rRb, bFHRKA, acL, CkHP, PSup, hPMHo, Zons, JNSlV, zyCBD, gku, OMrRbh, VJOsGO, bMj, SLGzU, Tft, fYwSW, OuJZ, orY, OWYDGT, lENye, jOD, TiqPru, fEQxb, EiR, wCnIlc, Agco, YDl, GFrHl, omwN, Oeu, WnVcRz, pxnk,