Bank of America (BAC) Stock Rises as Board Plans Vote on Change to CEO, Chairman Roles

NEW YORK (TheStreet) -- Shares of Bank of America  (BAC) rose 0.84% to $16.25 in morning trading Monday after the bank said it is planning a shareholder vote on the board's October decision to allow CEO Brian Moynihan to also be chairman.

The board changed its bylaws to permit Moynihan to serve both roles, but Moynihan and Jack Bovender, the lead independent director of the board, said in a letter to shareholders Monday that a vote on this matter would occur no later than 2016, according to Reuters.

The letter is in response to shareholder remarks that have come in since the board made the change on its own. The board's change in October reversed a decision it had made during the financial crisis to have separate people serve as CEO and chairman.

Bank of America's letter Monday comes two days before its annual shareholder meeting in Charlotte on Wednesday.

Separately, TheStreet Ratings team rates BANK OF AMERICA CORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate BANK OF AMERICA CORP (BAC) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its increase in net income, expanding profit margins, growth in earnings per share and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 1316.3% when compared to the same quarter one year prior, rising from -$276.00 million to $3,357.00 million.
  • The gross profit margin for BANK OF AMERICA CORP is currently very high, coming in at 86.18%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 14.15% is above that of the industry average.
  • BANK OF AMERICA CORP reported significant earnings per share improvement in the most recent quarter compared to 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 reported lower earnings of $0.35 versus $0.91 in the prior year. This year, the market expects an improvement in earnings ($1.33 versus $0.35).
  • BAC, with its decline in revenue, slightly underperformed the industry average of 0.9%. Since the same quarter one year prior, revenues slightly dropped by 6.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
  • You can view the full analysis from the report here: BAC Ratings Report

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