Bank Of America Would Bear The Brunt Of Higher Operating And Credit Costs: Analyst
Portfolio Pulse from Nabaparna Bhattacharya
BMO Capital Markets analyst James Fotheringham maintained a Market Perform rating on Bank Of America Corporation (BAC) but lowered the price target from $37 to $36. The adjustment follows BAC's Q4 2023 miss driven by higher operating and credit costs, and reduced share repurchase expectations. Fotheringham suggests better return potential in other U.S. FIG stocks, highlighting AerCap Holdings (AER) and Air Lease Corporation (AL) as having less exposure to risks. BAC's Q4 revenue declined 10% Y/Y, and core EPS of $0.66 missed consensus by 7%. The 2024 core EPS estimate for BAC was reduced to $3.13 from $3.29, while the 2025 estimate remains nearly the same. BAC shares dropped 2.07% to $32.12.
January 16, 2024 | 9:32 pm
News sentiment analysis
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NEGATIVE IMPACT
Bank Of America's price target was lowered to $36 by BMO analyst following a Q4 miss attributed to higher operating and credit costs, with a reduced share repurchase forecast.
The reduction in price target and the Q4 earnings miss due to increased costs are likely to negatively impact investor sentiment and the stock price in the short term.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100
POSITIVE IMPACT
AerCap Holdings was highlighted by BMO analyst as having greater investment opportunities with less exposure to funding, regulatory, and credit risks.
The positive mention by the analyst as a preferable investment option could lead to increased investor interest and a potential uptick in the stock price.
CONFIDENCE 80
IMPORTANCE 75
RELEVANCE 70
POSITIVE IMPACT
Air Lease Corporation was mentioned by BMO analyst as a better investment opportunity compared to Bank Of America, with less risk exposure.
The analyst's recommendation as a more reliable investment could lead to positive investor sentiment and an increase in the stock price in the short term.
CONFIDENCE 80
IMPORTANCE 75
RELEVANCE 70