Bank of America (NYSE:BAC) Trading Down 2% - Here's Why

Key Points

• Bank of America's stock (NYSE:BAC) declined by 2% during trading, closing at $49.33, with a significant drop in trading volume compared to its average session.
• Analysts provided mixed reviews, with multiple downgrades to "hold" ratings while others increased their price targets, indicating a generally cautious outlook.
• The company announced an increase in its quarterly dividend to $0.28 per share and initiated a $40 billion stock buyback plan, reflecting potential confidence in its stock value.

Bank of America Corporation (NYSE:BAC)'s stock price traded down 2% during trading on Friday . The stock traded as low as $49.28 and last traded at $49.33. 11,511,829 shares were traded during trading, a decline of 72% from the average session volume of 41,739,988 shares. The stock had previously closed at $50.34.

Analyst Upgrades and Downgrades

Several equities research analysts have recently commented on the stock. Hsbc Global Res downgraded shares of Bank of America from a "strong-buy" rating to a "hold" rating in a research report on Tuesday, July 8th. Baird R W lowered shares of Bank of America from a "strong-buy" rating to a "hold" rating in a report on Friday, June 27th. Citigroup increased their price target on shares of Bank of America from $50.00 to $54.00 and gave the stock a "buy" rating in a report on Thursday, June 26th. The Goldman Sachs Group increased their price target on shares of Bank of America from $46.00 to $52.00 and gave the company a "buy" rating in a research report on Tuesday, June 10th. Finally, Oppenheimer lifted their price target on shares of Bank of America from $55.00 to $57.00 and gave the company an "outperform" rating in a research report on Wednesday, July 30th. Sixteen research analysts have rated the stock with a Buy rating and five have given a Hold rating to the stock. According to data from MarketBeat, the company currently has an average rating of "Moderate Buy" and an average target price of $50.39.

Bank of America Price Performance

The company has a debt-to-equity ratio of 1.14, a current ratio of 0.80 and a quick ratio of 0.79. The firm has a market cap of $368.07 billion, a P/E ratio of 14.53, a PEG ratio of 1.94 and a beta of 1.34. The stock's 50-day simple moving average is $47.89 and its two-hundred day simple moving average is $44.07.

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

Bank of America Increases Dividend

The firm also recently disclosed a quarterly dividend, which will be paid on Friday, September 26th. Investors of record on Friday, September 5th will be paid a $0.28 dividend. This represents a $1.12 dividend on an annualized basis and a yield of 2.3%. This is a boost from Bank of America's previous quarterly dividend of $0.26. The ex-dividend date of this dividend is Friday, September 5th. Bank of America's payout ratio is currently 30.41%.

Bank of America announced that its board has approved a stock buyback plan on Wednesday, July 23rd that permits the company to buyback $40.00 billion in shares. This buyback authorization permits the financial services provider to purchase up to 11.1% of its shares through open market purchases. Shares buyback plans are typically an indication that the company's board believes its stock is undervalued.

Insider Activity at Bank of America

In other Bank of America news, insider James P. Demare sold 148,391 shares of the stock in a transaction dated Friday, August 1st. The shares were 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 approximately $10,180,656.99. This represents a 39.91% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which can be accessed through this hyperlink. Insiders own 0.30% of the company's stock.

Hedge Funds Weigh In On Bank of America

Institutional investors have recently bought and sold shares of the business. American Trust grew its stake in shares of Bank of America by 64.0% during the 2nd quarter. American Trust now owns 7,939 shares of the financial services provider's stock worth $376,000 after purchasing an additional 3,099 shares during the period. PVG Asset Management Corp purchased a new position in Bank of America in the 2nd quarter valued at $217,000. Evolution Wealth Management Inc. purchased a new position in Bank of America in the 2nd quarter valued at $281,000. Total Investment Management Inc. purchased a new position in Bank of America in the 2nd quarter valued at $41,000. Finally, Lavaca Capital LLC boosted its position in shares of Bank of America by 41.3% during the 2nd quarter. Lavaca Capital LLC now owns 7,874 shares of the financial services provider's stock valued at $373,000 after acquiring an additional 2,300 shares during the last quarter. 70.71% of the stock is owned by hedge funds and other institutional investors.

About Bank of America

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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