Bank of America Recovery Appears to Be Stalling

Bank of America Corporation, the third largest of the four “too big to fail” money center banks, reported quarterly earnings before the opening bell on Wednesday, Jan. 17. Results were mixed and included a $2.9 billion write-off due to the tax law. The stock did not manage to set a new 52-week high during pre-market trading.

All four “too big to fail” money center banks have now reported fourth quarter earnings. Each bank reported write-offs related to the new tax law, but they see positive benefits in the long term from the low 21% corporate tax rate. Investors beware: these benefits may now be priced into future earnings.

Bank of America stock closed Tuesday at $31.24, up 5.8% year to date and in bull market territory at 41.9% above its 52-week low of $22.01 set a year ago today. The stock set its multi-year intraday high of $31.79 on Jan. 16, 2018.  Bank of America ended the third quarter of 2017 with $1.75 trillion worth of assets on its balance sheet, which equates to 10.1% of the entire banking system. This represents a year-over-year gain of 3.9%, so this “too big to fail” bank keeps getting bigger. (See also: BofA Net Profit Slumps on $2.9 Bln Tax Charge, Adjusted Income Beats.)

 

The third largest of the four “too big to fail” money center banks has a reasonable P/E ratio of 15.85 and a dividend yield of 1.54%. …read more

Read more here: Bank of America Recovery Appears to Be Stalling

Category: BAC

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