Bank of America Corp. (BAC Stock)

The U.S. Banking stocks are fighting the turmoil caused by the Fed stress test. The Bank of America Corporation (NASDAQ: BAC) stock swelled by 2.10%. The Federal Reserve released the results of the bank’s annual health check, and big players like JPMorgan Chase & Co. (NYSE: JPM), Wells Fargo & Co. (NYSE: WFC), and Bank of America Corp. (NYSE: BAC) scored between 2% and 4.5%. 

The results show that these banks are strong enough to withstand economic turmoil. The authorities are planning to raise the capital requirements for banks above $100 billion of assets in order  to counter upcoming scenarios. 

Bank of America Corp. (BAC Stock) – Test Results and Financial Analysis

Considering the upcoming possibility of a recession and the lousy effect of inflation on the economy at large, the positive test results indicate the bank’s capacity to continue amid a financial storm. The results were positive for 23 bigger banks, but investors and the general public are more concerned about the points gained by over 400 smaller banks. 

Multiple mid-sized and regional lenders somehow managed to stay within the stress test’s required range. KBW Regional Banking Index gained 1.82%. The index recovered by around 8% in June 2023 but is still down by 23% YTD. Wells Fargo & Co. (NYSE: WFC) gained about 4.51% to $42.45, and JPMorgan Chase and Co. (NYSE: JPM) rallied 3.49% to $143.43.

At press time, BAC Stock is trading at $28.66 after gaining 2.10%.Its previous close and open were at $28.07 and $28.50, respectively. The 52-week change shows a drop of 1,105.83%. The trailing twelve-month (ttm) price to earnings (P/E) ratio is 8.56, an indication of undervalue, and the earnings per share (EPS) comes at $3.35. 

With an average volume of 52.70 million shares, the market cap is $228.396 billion. Analysts placed a 2.44 rating for HOLD, considering the current macroeconomic situation. They also estimated a price target of $36.77, with an upside of 28.3%. The projected earnings growth fell by 3.52% from $3.41 to $3.29 per share. 

The last earnings were reported on April 18, 2023, where the revenue of 26.391 $billion surpassed the estimated value of $25.161 Billion by 4.98%. Despite the positive report, the BAC share price fell by around 8% before gaining a short-lived momentum. The price then dropped by about 14% from the price at the time of earnings. 

As per March 2023 data, the revenue swelled by 9.18% to $25.33 Billion, while the revenue (ttm) is reported to be $94.54 Billion. The revenue per share (ttm) is $11.68, with a 9.20% year-over-year (YoY) quarterly revenue growth. 

The total cash in hand at the end of the most recent quarter (mrq) is $893.12 billion, and the total debt is $705.12 Billion. The gross profit (ttm) comes to $92.41 Billion, and the firm’s profit margin swelled by 30.28%. The operating margin hiked by 34.04%, and the net profit margin gained 5.78% and came to 32.22. 

Bank of America Corp. (BAC Stock) – Candle Exploration

Despite positive earnings, the BAC share price is consolidating in a narrow range, indicating a base formation for future rallies. A descending EMA shows weakness, and the RSI value of 51.42 stays in neutral territory. If the price breaks the range from the top, the price could break R1. However, price action will have to stabilize to go ahead. 

If the range gets a breakthrough and the price slides below the demand zone, a new 52-week low can be formed. Moreover, the current price is slightly above the vertical descending trend line. This shows that the price might consolidate in an ascending order to rally ahead. 

Disclaimer: 

The views and opinions stated by the author, or any people named in this article, are for informational purposes only and do not establish financial, investment, or other advice. Investing in or trading comes with a risk of financial loss.

Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing

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