Bank of America (NYSE:BAC) Hits New 12-Month High - Here's Why

Key Points

• Bank of America (NYSE:BAC) has reached a new 12-month high of $50.64 in trading, marking a significant milestone for the stock.
• The company's recent earnings report showed a profit of $0.89 per share, exceeding expectations, and a year-over-year revenue increase of 4.3%.
• Bank of America announced an increase in its quarterly dividend to $0.28, reflecting confidence in its financial stability and growth prospects.

Shares of Bank of America Corporation (NYSE:BAC) reached a new 52-week high on Friday . The stock traded as high as $50.64 and last traded at $50.51, with a volume of 32938437 shares traded. The stock had previously closed at $50.38.

Analyst Upgrades and Downgrades

Several research firms recently weighed in on BAC. Citigroup boosted their target price on Bank of America from $50.00 to $54.00 and gave the stock a "buy" rating in a research note on Thursday, June 26th. Phillip Securities cut Bank of America from a "strong-buy" rating to a "moderate buy" rating in a research note on Friday, July 25th. Morgan Stanley boosted their target price on Bank of America from $47.00 to $49.00 and gave the stock an "overweight" rating in a research note on Monday, June 23rd. HSBC cut Bank of America from a "buy" rating to a "hold" rating and boosted their price objective for the company from $47.00 to $51.00 in a research note on Monday, July 7th. Finally, Robert W. Baird reiterated a "neutral" rating and issued a $52.00 price objective on shares of Bank of America in a research note on Friday, June 27th. Seventeen equities research analysts have rated the stock with a Buy rating and five have given a Hold rating to the company's stock. According to MarketBeat.com, the company presently has an average rating of "Moderate Buy" and an average price target of $50.13.

Bank of America Stock Performance

The firm has a market cap of $375.98 billion, a price-to-earnings ratio of 14.84, a price-to-earnings-growth ratio of 1.97 and a beta of 1.34. 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 stock has a fifty day moving average price of $47.61 and a 200-day moving average price of $43.93.

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

Bank of America Increases Dividend

The business also recently announced a quarterly dividend, which will be paid on Friday, September 26th. Stockholders of record on Friday, September 5th will be issued a $0.28 dividend. The ex-dividend date of this dividend is Friday, September 5th. This is an increase from Bank of America's previous quarterly dividend of $0.26. This represents a $1.12 dividend on an annualized basis and a dividend yield of 2.2%. Bank of America's dividend payout ratio is presently 30.41%.

Bank of America declared that its Board of Directors has authorized a share buyback program on Wednesday, July 23rd that allows the company to buyback $40.00 billion in outstanding shares. This buyback authorization allows the financial services provider to buy up to 11.1% of its shares through open market purchases. Shares buyback programs are typically a sign that the company's board of directors believes its stock is undervalued.

Insiders Place Their Bets

In related news, insider James P. Demare sold 148,391 shares of the company's stock in a transaction on 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 transaction, the insider owned 223,407 shares of the company's stock, valued at $10,180,656.99. This represents a 39.91% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available at this link. 0.30% of the stock is owned by corporate insiders.

Institutional Trading of Bank of America

Several institutional investors and hedge funds have recently made changes to their positions in BAC. Quaker Wealth Management LLC lifted its stake in shares of Bank of America by 246.5% during the 2nd quarter. Quaker Wealth Management LLC now owns 523 shares of the financial services provider's stock worth $25,000 after purchasing an additional 880 shares during the period. Nova Wealth Management Inc. lifted its position in Bank of America by 75.2% during the second quarter. Nova Wealth Management Inc. now owns 529 shares of the financial services provider's stock worth $25,000 after buying an additional 227 shares during the period. RMG Wealth Management LLC purchased a new position in Bank of America during the second quarter worth about $28,000. CGC Financial Services LLC lifted its position in Bank of America by 585.4% during the second quarter. CGC Financial Services LLC now owns 610 shares of the financial services provider's stock worth $29,000 after buying an additional 521 shares during the period. Finally, Wealth Preservation Advisors LLC lifted its position in Bank of America by 48.7% during the second quarter. Wealth Preservation Advisors LLC now owns 681 shares of the financial services provider's stock worth $32,000 after buying an additional 223 shares during the period. 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.