Bank of America share price forecast ahead Q4 results

Bank of America Corporation (NYSE: BAC) is scheduled to announce second-quarter earnings results on Wednesday, January 19, before the market opens.

Shares of this bank continue to trade in a bull market, and according to UBS analysts, Bank of America represents a top pick.

UBS sees upside potential

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Bank of America will announce fourth-quarter earnings results this Wednesday, and the bank should benefit from continued solid credit quality and a resumption of loan growth.

The consensus earnings per share estimate stands at $0.76, while the consensus revenue estimate is $22.19 billion (+10.4% Y/Y).

It is important to mention that over the last twelve months, Bank of America has beaten EPS estimates 75% of the time and has beaten revenue estimates 75% of the time.

UBS analysts, led by Erika Najarian and Keith Parker, said that they expect significant upside potential for banks’ stocks, and according to them, Bank of America represents a top pick.

Bank of America shares continue to trade in a bull market supported with expectations for the Federal Reserve rate hikes.

The U.S. central bank increased the reduction in bond-buying on a monthly basis from $15 billion to $30 billion, and according to Fed Chair Jerome Powell, the U.S. central bank will consider three rate hikes in 2022.

JPMorgan analyst Vivek Juneja also said that he expects significant upside potential for banks’ stocks, and Bank of America should benefit from the rise in long-term rates plus future rate hikes.

Bank of America’s credit card charge-off rate raised from 1.24% in November to 1.35% in December 2021, but it was still down from 1.67% in December 2020.

The positive news is that consumer spending has surpassed pre-pandemic levels, deposit growth remains strong, and profitability should rise in 2022 and beyond due to a combination of positive factors.

This month, Bank of America has introduced a new way for corporate and commercial clients to better manage their cash flows. CashPro Global Product Head Tom Durkin said:

We’re going into a raising-rate environment, so you need an effective tool that sets your cash position. CashPro gathers data and predicts future cash positions across a company’s bank accounts through artificial intelligence.

Technical analysis

Bank of America shares continue to trade in a bull market, and if the bank post strong fourth-quarter earnings results, the share price could be above the current levels.

Rising above $50 resistance supports the positive trend, and the next price target could be around $53.

On the other side, if the price falls below $40 support, it would be a “sell” signal, and we have the open way to $35.

Summary

Bank of America is scheduled to announce second-quarter earnings results on Wednesday, January 19, before the market opens, and if the bank posts strong results, the share price could be above the current levels. The consensus earnings per share estimate stands at $0.76, while the consensus revenue estimate is $22.19 billion.

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