2024-04-16 12:41:49 ET
Summary
- Bank of America's Q1 earnings report beat market expectations, with non-GAAP EPS of $0.83 and revenues of $25.82B.
- The bank's strong balance sheet and capital ratios position it well for growth and potential regulatory changes.
- Other growth catalysts include high interest rates, increased wealth management fees, and diverse operations in various segments.
- The valuation is still cheap. Trading at about 10x FWD pretax earnings, it still fits Buffett's 10xEBT rule well.
Thesis
The last time I wrote on Bank of America ( BAC ) was back in October 2023, right before its release of 2023 Q3 quarterly earnings. In that article (see the next chart below) I argued for a bull thesis based on the following key considerations:
A) The expectation that its Q3 EPS to be toward the high end of consensus estimates thanks to a few ongoing catalysts
And B) the value-price gap is too large to ignore, and it was a good time to buy a good bank at cheap valuation.
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For further details see:
Bank Of America Q1: Still Fits Buffett's 10xEBT Rule Well