2024-04-27 10:00:00 ET
Summary
- We are maintaining our Buy rating for BAC, with the stock's massive returns of +52.2% well outperforming the wider market at +23% since October 2023.
- Even so, the stock is merely fairly valued here, with the bank still generating robust profitability metrics despite the elevated interest rate environment and normalizing loan portfolio losses.
- With the EU Central Bank signaling their first cut by June 2024, a Fed rate cut may occur over the next few months, downplaying the impact of BAC's unrealized losses.
- Combined with the (prospective) dual pronged returns through moderate capital appreciation and dividend payouts, BAC continues to offer a viable investment thesis.
We previously covered Bank of America (NYSE: BAC ) in October 2023, discussing the massive pessimism embedded in the stock's valuations and its mixed prospects, thanks to the mistaken perception that its unrealized losses were growing.
While we continued rating the stock as a Buy here, thanks to the outperformance of its quarterly financial reports, investors might want to brace for impact, since it remained to be seen when bullish support might materialize....
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For further details see:
Bank Of America: Now Fairly Valued - H2'23 To Bring Forth Rich Interest Incomes