Bank Of America Loan Growth Is Better Than Peers, Analysts Predict 'Good Core Operating Leverage'

Zinger Key Points
  • Bank of America’s Q1 core EPS and NII came in higher than Street expectations, one analyst said.
  • NII continues to be a concern, but management is trying to turn things around, another analyst added.

Shares of Bank of America Corp BAC were rising in early trading on Wednesday, even as other financial stocks came under pressure after earnings.

Here are some key analyst takeaways from the release.

  • Goldman Sachs analyst Richard Ramsden reiterated a Buy rating, while reducing the price target from $42 to $41.
  • JPMorgan analyst Vivek Juneja maintained an Overweight rating and price target of $39.50.
  • Oppenheimer analyst Chris Kotowski reaffirmed an Overweight rating and price target of $45.

Check out other analyst stock ratings.

Goldman Sachs: Bank of America's core earnings of 81 cents per share came in higher than Street expectations of 78 cents per share and net interest income of $220 million was also 2% higher, Ramsden said in a note. The guidance for the second quarter is "roughly the same amount above consensus, with management pointing to 2Q24 being the trough NII quarter," he added.

"All in, we view the stronger NII guidance, constructive credit guidance, and only modestly higher expense outlook as modestly better, and believe the sell-off on the day of earnings presents an attractive entry point," the analyst further wrote.

JPMorgan: "BofA's results benefited from markets-related revenues: investment banking, trading and wealth management," Juneja said. Although NII has been a key concern, with pressure from low yielding securities, "management is trying to slowly turn this around," he added.

"NII benefited to a small extent from better C&I loan trends than peers including modest increase qoq in its revolver utilization rate, better than peers," the analyst stated.

Oppenheimer: Bank of America reported "solid" first-quarter results and guided to NII reaching close to $14 billion, Kotowski said in a note.


Management also indicated that expenses could decline in 2Q and "then trend lower in the back half," the analyst stated. "All that implies good core operating leverage for the next three quarters," he added.

BAC Price Action: Shares of Bank of America had risen by 1.73% to $35.31 at the time of publication on Wednesday.

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Posted In: Analyst ColorEarnings MissesPrice TargetReiterationTop StoriesAnalyst Ratingsbanksbig banksChris KotowskiExpert IdeasGoldman SachsJPMorganOppenheimerRichard RamsdenStories That MatterVivek Juneja
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