Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. NEW YORK ( TheStreet) -- Bank of America Corporation (NYSE: BAC) 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 growth in earnings per share, increase in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and disappointing return on equity.
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- BANK OF AMERICA CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. 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 ($0.92 versus $0.25).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Diversified Financial Services industry average. The net income increased by 62.9% when compared to the same quarter one year prior, rising from $2,463.00 million to $4,012.00 million.
- The gross profit margin for BANK OF AMERICA CORP is currently very high, coming in at 82.74%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 15.42% trails the industry average.
- The debt-to-equity ratio is very high at 2.34 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Diversified Financial Services industry and the overall market, BANK OF AMERICA CORP's return on equity significantly trails that of both the industry average and the S&P 500.
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