Bank of America Corporation (NYSE:BAC) Just Released Its Second-Quarter Results And Analysts Are Updating Their Estimates

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Bank of America Corporation (NYSE:BAC) Just Released Its Second-Quarter Results And Analysts Are Updating Their Estimates

Last week, you might have seen that Bank of America Corporation (NYSE:BAC) released its quarterly result to the market. The early response was not positive, with shares down 9.8% to US$37.58 in the past week. The result was positive overall – although revenues of US$25b were in line with what the analysts predicted, Bank of America surprised by delivering a statutory profit of US$0.83 per share, modestly greater than expected. Earnings are an important time for investors, as they can track a company’s performance, look at what the analysts are forecasting for next year, and see if there’s been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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Following the latest results, Bank of America’s 17 analysts are now forecasting revenues of US$102.2b in 2024. This would be a notable 9.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to step up 10% to US$3.24. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$102.3b and earnings per share (EPS) of US$3.24 in 2024. The consensus analysts don’t seem to have seen anything in these results that would have changed their view on the business, given there’s been no major change to their estimates.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$45.51. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company’s valuation. The most optimistic Bank of America analyst has a price target of US$52.00 per share, while the most pessimistic values it at US$38.00. As you can see, analysts are not all in agreement on the stock’s future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Of course, another way to look at these forecasts is to place them into context against the

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itself. It’s clear from the latest estimates that Bank of America’s rate of growth is expected to accelerate meaningfully, with the forecast 20% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 3.7% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.3% per year. It seems obvious that, while the growth

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is brighter than the recent past, the analysts also expect Bank of America to grow faster than the wider industry.

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The Bottom Line

The most important thing to take away is that there’s been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$45.51, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn’t be too quick to come to a conclusion on Bank of America. Long-term earnings power is much more important than next year’s profits. We have forecasts for Bank of America going out to 2026, and you can

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Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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