Bank of America (NYSE:BAC) Trading Up 2.9% - Should You Buy?

Key Points

• Bank of America shares rose by 2.9%, closing at $47.49, amidst a trading volume that was 80% lower than average.
• Consensus ratings indicate a "Moderate Buy" for Bank of America, with a varied range of price targets set by analysts, including a high of $54.00 and a low of $42.00.
• The company announced a quarterly dividend increase to $0.28 per share, along with a $40 billion share buyback program indicating confidence in the stock's value.

Bank of America Corporation (NYSE:BAC)'s stock price rose 2.9% during trading on Tuesday . The stock traded as high as $47.32 and last traded at $47.49. Approximately 8,526,535 shares were traded during mid-day trading, a decline of 80% from the average daily volume of 42,437,391 shares. The stock had previously closed at $46.16.

Analyst Ratings Changes

Several analysts have recently issued reports on BAC shares. Oppenheimer increased their price objective on Bank of America from $55.00 to $57.00 and gave the company an "outperform" rating in a research note on Wednesday, July 30th. TD Cowen initiated coverage on Bank of America in a research report on Thursday, May 15th. They set a "buy" rating and a $53.00 price objective for the company. Cowen assumed coverage on shares of Bank of America in a report on Wednesday, May 14th. They issued a "buy" rating on the stock. Royal Bank Of Canada set a $53.00 price target on shares of Bank of America and gave the stock an "outperform" rating in a research note on Monday, June 30th. Finally, Morgan Stanley increased their price objective on shares of Bank of America from $47.00 to $49.00 and gave the company an "overweight" rating in a research report on Monday, June 23rd. One research analyst has rated the stock with a sell rating, five have issued a hold rating and seventeen have issued a buy rating to the company. Based on data from MarketBeat, Bank of America has an average rating of "Moderate Buy" and a consensus price target of $50.13.

Bank of America Stock Performance

The company has a market cap of $347.46 billion, a PE ratio of 13.72, a PEG ratio of 1.85 and a beta of 1.31. The stock has a 50 day simple moving average of $46.69 and a two-hundred day simple moving average of $43.79. The company has a debt-to-equity ratio of 1.14, a current ratio of 0.80 and a quick ratio of 0.79.

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

Bank of America Increases Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Friday, September 26th. Shareholders of record on Friday, September 5th will be given a dividend of $0.28 per share. This represents a $1.12 dividend on an annualized basis and a yield of 2.4%. The ex-dividend date of this dividend is Friday, September 5th. This is a positive change from Bank of America's previous quarterly dividend of $0.26. Bank of America's payout ratio is 30.41%.

Bank of America declared that its Board of Directors has authorized a stock repurchase plan on Wednesday, July 23rd that authorizes the company to repurchase $40.00 billion in outstanding shares. This repurchase authorization authorizes the financial services provider to purchase up to 11.1% of its stock through open market purchases. Stock repurchase plans are often a sign that the company's management believes its stock is undervalued.

Insider Activity

In related news, insider James P. Demare sold 148,391 shares of the 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 completion of the sale, the insider directly owned 223,407 shares of the company's stock, valued at $10,180,656.99. This trade represents a 39.91% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. Insiders own 0.30% of the company's stock.

Institutional Trading of Bank of America

Hedge funds and other institutional investors have recently made changes to their positions in the company. Brighton Jones LLC lifted its holdings in shares of Bank of America by 30.0% in the 4th quarter. Brighton Jones LLC now owns 108,872 shares of the financial services provider's stock valued at $4,785,000 after buying an additional 25,143 shares during the period. Bank Pictet & Cie Europe AG lifted its holdings in Bank of America by 35.7% in the fourth quarter. Bank Pictet & Cie Europe AG now owns 860,005 shares of the financial services provider's stock valued at $37,797,000 after acquiring an additional 226,246 shares during the period. MSH Capital Advisors LLC purchased a new stake in shares of Bank of America during the 4th quarter worth $631,000. Salzhauer Michael increased its holdings in shares of Bank of America by 27.5% in the 4th quarter. Salzhauer Michael now owns 1,752,003 shares of the financial services provider's stock valued at $77,001,000 after purchasing an additional 377,900 shares in the last quarter. Finally, GKV Capital Management Co. Inc. purchased a new position in shares of Bank of America in the 4th quarter valued at about $88,000. Hedge funds and other institutional investors own 70.71% of the company's stock.

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.