Bank of America (NYSE:BAC) Hits New 12-Month High - What's Next?

Key Points

• Bank of America recently hit a new 52-week high of $49.66, with significant volume traded during the day.
• Despite the recent highs, several analysts have downgraded the stock, with an average target price now at $50.13 and a "Moderate Buy" rating.
• The company has approved a $40 billion stock buyback program and increased its quarterly dividend to $0.28, reflecting confidence in its financial stability.

Bank of America Corporation (NYSE:BAC)'s stock price reached a new 52-week high during mid-day trading on Saturday . The company traded as high as $49.66 and last traded at $49.49, with a volume of 45055019 shares traded. The stock had previously closed at $48.26.

Wall Street Analysts Forecast Growth

BAC has been the subject of a number of recent research reports. HSBC downgraded Bank of America from a "buy" rating to a "hold" rating and raised their target price for the stock from $47.00 to $51.00 in a research report on Monday, July 7th. Wall Street Zen downgraded Bank of America from a "hold" rating to a "sell" rating in a research report on Thursday, May 22nd. Robert W. Baird reissued a "neutral" rating and issued a $52.00 target price on shares of Bank of America in a research report on Friday, June 27th. The Goldman Sachs Group raised their target price on Bank of America from $46.00 to $52.00 and gave the stock a "buy" rating in a research report on Tuesday, June 10th. Finally, Cowen initiated coverage on Bank of America in a research report on Wednesday, May 14th. They issued a "buy" rating for the company. Seventeen equities research analysts have rated the stock with a Buy rating and five have assigned a Hold rating to the company's stock. Based on data from MarketBeat, the stock currently has an average rating of "Moderate Buy" and an average target price of $50.13.

Bank of America Stock Performance

The company has a market capitalization of $366.53 billion, a PE ratio of 14.47, a PEG ratio of 1.87 and a beta of 1.31. The company has a quick ratio of 0.79, a current ratio of 0.80 and a debt-to-equity ratio of 1.14. The company has a 50-day moving average price of $47.06 and a two-hundred day moving average price of $43.86.

Bank of America (NYSE:BAC - Get Free Report) last announced its quarterly earnings results on Wednesday, July 16th. The financial services provider reported $0.89 earnings per share for the quarter, beating the consensus estimate of $0.86 by $0.03. The company had revenue of ($22,273.00) million during the quarter, compared to analysts' expectations of $26.79 billion. Bank of America had a return on equity of 10.25% and a net margin of 14.81%.The firm's quarterly revenue was up 4.3% compared to the same quarter last year. During the same period in the previous year, the business earned $0.83 earnings per share. Analysts predict that Bank of America Corporation will post 3.7 EPS for the current fiscal year.

Bank of America Increases Dividend

The business also recently declared a quarterly dividend, which will be paid on Friday, September 26th. Stockholders of record on Friday, September 5th will be given a $0.28 dividend. This represents a $1.12 annualized dividend and a dividend yield of 2.3%. This is a boost from Bank of America's previous quarterly dividend of $0.26. The ex-dividend date is Friday, September 5th. Bank of America's dividend payout ratio (DPR) is presently 30.41%.

Bank of America declared that its board has approved a stock buyback program on Wednesday, July 23rd that allows the company to buyback $40.00 billion in shares. This buyback authorization allows the financial services provider to purchase up to 11.1% of its stock through open market purchases. Stock buyback programs are typically an indication that the company's leadership believes its shares are undervalued.

Insider Buying and Selling

In related news, insider James P. Demare sold 148,391 shares of the business's stock in a transaction dated Friday, August 1st. The stock was sold at an average price of $45.57, for a total transaction of $6,762,177.87. Following the completion of the transaction, the insider directly owned 223,407 shares in the company, valued at $10,180,656.99. The trade was a 39.91% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. 0.30% of the stock is currently owned by insiders.

Hedge Funds Weigh In On Bank of America

Hedge funds and other institutional investors have recently added to or reduced their stakes in the business. Nicholas Hoffman & Company LLC. grew its position in Bank of America by 121.0% during the first quarter. Nicholas Hoffman & Company LLC. now owns 62,041 shares of the financial services provider's stock worth $2,589,000 after buying an additional 33,963 shares in the last quarter. Gradient Investments LLC grew its position in Bank of America by 7.8% during the first quarter. Gradient Investments LLC now owns 696,416 shares of the financial services provider's stock worth $29,061,000 after buying an additional 50,296 shares in the last quarter. Prosperity Wealth Management Inc. purchased a new position in Bank of America during the first quarter worth about $998,000. Alpha Cubed Investments LLC lifted its stake in Bank of America by 37.2% during the first quarter. Alpha Cubed Investments LLC now owns 65,038 shares of the financial services provider's stock worth $2,714,000 after purchasing an additional 17,619 shares during the last quarter. Finally, International Assets Investment Management LLC lifted its stake in Bank of America by 170.5% during the first quarter. International Assets Investment Management LLC now owns 238,473 shares of the financial services provider's stock worth $9,951,000 after purchasing an additional 150,299 shares during the last quarter. 70.71% of the stock is currently owned by hedge funds and other institutional investors.

Bank of America 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. It operates in four segments: Consumer Banking, Global Wealth & Investment Management (GWIM), Global Banking, and Global Markets.

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