Bank of America shares close lower on Monday, quarterly earnings top expectations as loan growth, lower expenses support

Bank of America Corps (BAC) quarterly earnings, reported on Monday, topped Wall Street estimates, supported by strong growth in loans as well as in net interest income. The US lender also benefited from lower operating expenses.

Bank of America shares closed lower for the fifth time in the past nine trading sessions in New York on Monday. The stock went down 1.90% ($0.54) to $27.92, after touching an intraday low at $27.64, or a price level not seen since July 6th ($27.63).

Shares of Bank of America Corporation have retreated 5.42% so far in 2018 compared with a 2.89% 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.

Loans in Bank of Americas consumer banking business went up 6% year-on-year to $285 billion during the quarter ended on September 30th, while its total deposits grew 5% to $1.35 trillion.

Bank of Americas net interest income went up 6.4% year-on-year to $11.87 billion during the past quarter, after the Federal Reserve Bank introduced four rate hikes since the third quarter of 2017.

The second-largest US bank by assets said its non-interest expenditures had decreased 2.4% year-on-year to $13.07 billion during the third quarter, in part because of a 2% reduction in workforce across businesses.

Meanwhile, net income attributable to the banks common shareholders surged 35% year-on-year to $6.7 billion during the quarter ended on September 30th.

Bank of Americas earnings per share, excluding special items, were reported at $0.67 during the latest quarter, which outstripped the median forecast by analysts pointing to earnings of $0.62 per share.

According to CNN Money, the 29 analysts, offering 12-month forecasts regarding Bank of America’s stock price, have a median target of $35.00, with a high estimate of $40.00 and a low estimate of $28.00. The median estimate represents a 25.36% upside compared to the closing price of $27.92 on October 15th.

The same media also reported that 16 out of 30 surveyed investment analysts had rated Bank of America’s stock as “Buy”, while 9 – as “Hold”.

Weekly Pivot Levels

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 – $28.87
R1 – $30.01
R2 – $31.56
R3 – $32.70
R4 – $33.84

S1 – $27.32
S2 – $26.18
S3 – $24.63
S4 – $23.08