Bank of America (NYSE: BAC) stock is trading higher in the early trading hours on Thursday as Baird, a prominent financial services firm, issued a bullish price forecast.
Baird has revised its financial outlook for Bank of America (BAC), increasing the price target from $35.00 to $38.00. The firm maintained a Neutral rating on the stock. This revision comes in the wake of the bank’s first-quarter earnings report for 2024, which met analyst predictions.
Bank of America reports first quarter 2024 core earnings per share at $0.76, just shy of the $0.77 consensus estimate. Despite incurring approximately $700 million in special assessment expenses from the Federal Deposit Insurance Corporation (FDIC), the bank demonstrated robust shareholder returns, totaling around $4.4 billion. These returns included dividends of approximately $1.9 billion and stock repurchases amounting to about $2.5 billion.
The bank saw a sequential increase of around 16% in pre-provision net revenue (PPNR). However, it declined year-over-year by 6%. BofA attributes this growth to a significant rise in fees, which saw a 47% increase from the previous quarter, coupled with relatively stable net interest income (NII) that showed a modest 1% quarter-over-quarter growth.
Moreover, the earnings report revealed a 6% rise in expenses for the bank compared to the previous quarter, which was higher than anticipated.
While several analysts viewed Bank of America’s financial results as generally satisfactory, they noted concerns about weaker credit trends, especially in commercial real estate (CRE) and card loans. Baird suggested that Bank of America’s stock presents an increasingly attractive investment opportunity when compared to its peers within the mega-cap banking sector, especially considering its trading at roughly 1.4 times its tangible book value (TBV).
Bank of America (NYSE: BAC) Stock Performance
At the time of publication, BAC stock has traded at $35.62, reflecting a 1.09% increase compared to the previous trading session. Traders have exchanged 1,924,985 (1.92 million) shares, which is lower than the average daily trading volume of 40.61 million.
