KBW Cuts Bank of America Estimates, Maintains at Market Perform

This year has not been kind for Bank of America BAC shareholders. The stock is down 15 percent to $15.20 after reaching a 5-year high above $18 per share. 

After this week’s earnings report, KBW is cutting its forecast for 2015 and 2016 earnings to $1.32 and $1.55 from $1.40 and $1.65. It has a price target of $17 on the bank. The firm sees the EPS reduction as a result of lower income from net interest and fees, as well as a higher tax rate. Specific to net interest, KBW decreased its estimates by $0.09 and $0.14 per share in 2015 and 2016, while noting that it also pushed back its timeline for a Fed interest rate hike.

Simultaneously, the firm notes that the economy – namely the unemployment rate – is a risk for Bank of America’s consumer-focused business.