This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Bank of America: Heading Into Earnings Loser

"When your kids don't like a product... we tend to listen to them," he said, adding that "they're much more involved in the mainstream."

Shares of Dell (DELL) popped 13% to close at $12.29, after Bloomberg News reported that the company was negotiating with private equity firms in a possible bid to take Dell private. With PC demand continuing to decline, Dell has been flailing about in an effort to transform itself into a provider of higher-margin technology services, on the order of IBM (IBM). Dell acquired Quest Software for $2.4 billion in September.

The KBW Bank Index (I:BKX) was down slightly to close at 52.95, with all but eight of the index components seeing declines. Bank earnings season will be in full swing on Wednesday, when JPMorgan Chase (JPM - Get Report), Goldman Sachs (GS) and Bank of New York Mellon (BK) announce their fourth-quarter results, with Bank of America, Citigroup (C), Capital One (COF), PNC (PNC), BB&T (BBT) and Huntington Bancshares (HBAN) set to make their announcements on Thursday.

Bank of America

Bank of America's shares are down 1% so far in 2013, after rising 110% during 2012. The shares had fallen 58% during 2011. Putting all those numbers together, the shares are down 13% since the end of 2010.

Last week was a very busy one for Bank of America, with the company beginning the week by announcing that it expected its fourth-quarter earnings to be "modestly positive," as a result of its mortgage putback settlement with Fannie Mae (FNMA) and because of its participation in an $8.5 billion mortgage foreclosure settlement with federal regulators.

Then on Wednesday, Credit Suisse analyst Moshe Orenbuch downgraded Bank of America to a neutral rating from an "Outperform" rating, even though he raised his price target for the shares by a dollar to $12.00. The analyst said that the stock's "current valuation appears to be ahead of the company's near to intermediate-term performance and appears to be discounting significantly faster improvements in efficiency than we would be expecting."

Orenbuch added that "At its current valuation, the shares appear to be discounting at least a 16% improvement in costs over the next year vs. our estimate of 10%," and that "despite the announced mortgage servicing sales, it will take until 2014 for the annual run-rate of expense saves. Separately, we think it will be hard for Bank of America to grow revenues faster than the 'average' bank."
2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
DELL $0.00 0.00%
AAPL $122.99 -0.32%
BAC $18.16 1.57%
JPM $68.94 1.31%
FB $96.99 1.78%

Markets

Chart of I:DJI
DOW 17,751.39 +121.12 0.69%
S&P 500 2,108.57 +15.32 0.73%
NASDAQ 5,111.7330 +22.5270 0.44%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs