Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a hold with a ratings score of C . The company's strengths can be seen in multiple areas, such as its expanding profit margins, solid stock price performance and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and weak operating cash flow.
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Highlights from the ratings report include:
- BANK OF AMERICA CORP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, BANK OF AMERICA CORP turned its bottom line around by earning $0.25 versus -$0.02 in the prior year. This year, the market expects an improvement in earnings ($1.00 versus $0.25).
- The revenue fell significantly faster than the industry average of 6.9%. Since the same quarter one year prior, revenues fell by 29.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The debt-to-equity ratio is very high at 2.53 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Diversified Financial Services industry. The net income has significantly decreased by 63.2% when compared to the same quarter one year ago, falling from $1,991.00 million to $732.00 million.
Bank of America Corporation, through its subsidiaries, provides various banking and financial products and services for individual consumers, small and middle market businesses, institutional investors, corporations, and governments in the United States and internationally. Bank of America has a market cap of $134.17 billion and is part of the financial sector and banking industry. The company has a P/E ratio of 49.6, above the S&P 500 P/E ratio of 17.7. Shares are up 5.8% year to date as of the close of trading on Tuesday.
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--Written by a member of TheStreet Ratings Staff.
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