Bank of America Corps second-quarter earnings, reported on Monday, surpassed market expectations, supported by sound loan growth, lower expenditures and a macroeconomic environment of lower corporate tax rates and higher interest rates.
Bank of America shares closed higher for the fifth time in the past eight trading sessions in New York on Monday. It has also been the sharpest daily surge since March 26th. The stock went up 4.31% ($1.23) to $29.78, after touching an intraday high at $29.85, or a price level not seen since June 14th ($30.05).
Shares of Bank of America Corporation have risen 0.88% so far in 2018 compared with a 4.67% gain for the underlying index, S&P 500 (SPX).
In 2017, Bank of America’s stock surged 33.57%, thus, it outperformed the S&P 500, which registered a 19.42% return.
The lenders revenue, net of interest expense, shrank to $22.6 billion during the second quarter ended on June 30th, from $22.8 billion in the same period a year earlier. Revenue in Q2 2017 included a $793 million pretax gain related with the sale of Bank of America’s non-US consumer card business.
Analysts on average had anticipated $22.29 billion in revenue.
The Wall Street bank’s total loans rose 2% during the latest quarter, as lending in its Consumer Banking segment went up 7% to $281 billion, while lending in its Global Wealth and Investment Management segment grew 7% to $161 billion.
At the same time, net interest income surged 6% year-on-year (or by $664 million) to $11.7 billion during the quarter ended on June 30th, since the bank’s deposits and mortgage securities enabled it to take advantage of the four interest rate hikes introduced by the Federal Reserve during the past 12 months.
Bank of Americas non-interest income went down 7% year-on-year (or by $884 million) to $11.0 billion during the second quarter, while its non-interest expense dropped 5% (or by $698 million) to $13.3 billion.
Net income attributable to shareholders surged 33% to $6.8 billion during the latest quarter, supported by stronger operating performance and the benefits stemming from the US tax code reform.
Meanwhile, the lenders earnings per share, excluding special items, were reported at $0.63 during the second quarter, which topped the median forecast by analysts pointing to earnings of $0.57 per share.
According to CNN Money, the 28 analysts, offering 12-month forecasts regarding Bank of America’s stock price, have a median target of $35.00, with a high estimate of $37.00 and a low estimate of $28.00. The median estimate represents a 17.53% upside compared to the closing price of $29.78 on July 16th.
The same media also reported that 15 out of 29 surveyed investment analysts had rated Bank of America’s stock as “Buy”, while 9 – as “Hold”.
Daily and Weekly Pivot Levels
With the help of the Camarilla calculation method, todays levels of importance for the Bank of America stock are presented as follows:
R1 – $29.88
R2 – $29.99
R3 (Range Resistance – Sell) – $30.09
R4 (Long Breakout) – $30.40
R5 (Breakout Target 1) – $30.76
R6 (Breakout Target 2) – $30.94
S1 – $29.68
S2 – $29.57
S3 (Range Support – Buy) – $29.47
S4 (Short Breakout) – $29.16
S5 (Breakout Target 1) – $28.80
S6 (Breakout Target 2) – $28.62
By using the traditional method of calculation, the weekly levels of importance for Bank of America Corporation (BAC) are presented as follows:
Central Pivot Point – $28.70
R1 – $29.18
R2 – $29.81
R3 – $30.29
R4 – $30.77
S1 – $28.07
S2 – $27.59
S3 – $26.96
S4 – $26.33