Bank of America: The Pack Leader In Financial Services (Technical Analysis) (NYSE:BAC)

Major Banks In U.S. Report Quarterly Earnings — Justin Sullivan

Introduction

With no negative return in 2022, Bank of America Corporation (NYSE:BAC) has proven to be a well-managed company with relatively strong forward guidance estimates. Dividend growth looks solid over the next five years. Day traders might want to refrain from investing in BAC as they seek short-term profit. Long-term investors, however, may be pleased to accumulate this relatively cheap stock, which could increase in the coming months.

Fundamental decent growth with no negative return this year

Growth

Bank of America has been lackluster in growth over the last five years. 2020 was not a kind year for them due to negative revenue growth and net income growth. One encouraging sign is that the previous year was its strongest year for net income growth.

Unnamed: 0	2017	2018	2019	2020	2021
Period	FY	FY	FY	FY	FY
Revenue growth	0.044	0.045	-0.000	-0.063	0.042
Net income growth	0.018	0.544	-0.025	-0.348	0.787

Source: Financial Modelling Prep.

Data

This year has been relatively strong for Bank of America, considering the positive returns thus far. Simple moving average periods of 20 and 50 days have been extreme.

Unnamed: 0	Values
SMA20	10.54%
SMA50	8.63%
SMA200	-2.96%

Source: FinViz.

Enterprise

There have been solid metrics for Bank of America with its stock price, market capitalization, and rebounding enterprise value.

Unnamed: 0	2017	2018	2019	2020	2021
Symbol	BAC	BAC	BAC	BAC	BAC
Stock price	31.880	29.070	33.480	29.650	45.870
Number of shares	10.196 B	10.097 B	9.390 B	8.753 B	8.493 B
Market capitalization	325.037 B	293.505 B	314.394 B	259.532 B	389.588 B
Enterprise value	416.518 B	358.136 B	410.787 B	154.778 B	338.093 B

Source: Financial Modelling Prep.

Estimate

Unlike big technology, future guidance estimate shows slow growth for Bank of America. So do not expect its dividend yield to grow either. Earnings per share will see some positive elevated change.

YEARLY ESTIMATES	2022	2023	2024	2025
Revenue	94,768	103,457	106,363	118,836
Dividend	0.89	0.93	1.04	1.16
Dividend Yield (in %)	2.46 %	2.57 %	2.87 %	3.21 %
EPS	3.18	3.74	4.06	5.10
P/E Ratio	11.38	9.66	8.90	7.09
EBIT	33,503	40,957	41,714	52,057
Net Profit	26,117	29,835	31,095	37,613
EPS (GAAP)	3.18	3.74	4.06	5.10

Source: BusinessInsider.

Technical Analysis of potential market entry

Fibonacci

Sometimes you can only rely on potential market entry as any stock price will cross above a Fibonacci trendline. However, based on the most recent strengthened stock price, it might be wise to add the Bank of America stock price to your watch list.

Bollinger Bonds

There is further confirmation as Bank of America stock price pushes through the upper Bollinger band guidance line, and this might be your signal for upward momentum to continue with the price. Is it time to buy into BAC stock right now?

MACD

Bank of America’s current stock price has broken the zero line, so it is wise to consider your market entry now. Other signals seem to clarify the price uptrend from this well-managed bank.

RSI

Be aware that Bank of America’s current price appears to be approaching an overbought condition on the relative strength indicator. So, should we expect a short-term sideways move? It depends on the overall stock market conditions within the United States.

Prediction via AI

Monte Carlo

Momentum is clearly in the Bank of America stock price as prediction paths show robust upward forecasting. Also, the normalized distribution chart shows a higher probability of stock prices increasing in the coming days, but this depends on the overall stock market momentum.

Regression

As for the forecasted red regression line, one could expect sideways movement for the next 30 days. We could expect long-term stock price performance based on other analysis styles, but it will be insignificant compared to other higher-performing market sectors.

The risk appears low and moot

Recommendation

Recommendations from other market analysts show quite a mixed story. From a short-term perspective for day traders, it would be wise to average dollar costs in any new positions of Bank of America. For long-term investors, one could start loading up on this stock as prices uptrend over the next few years. Remember that holding stocks that do not perform becomes an opportunity cost against other short-term performing instruments.

Interval	RECOMMENDATION	BUY	SELL	NEUTRAL
One month	SELL	6	10	10
One week	NEUTRAL	7	9	10
One day	BUY	13	3	10

Source: Trading View.

Price vs. Short Volume

Short trading volume has slightly spiked as Bank of America’s stock price rises for the near term. However, the shorting trend is below 50% of the total trading volume.

Sustainability

Bank of America has an average performance for sustainability but should be improved upon to see further investment from the most prominent American asset managers. Nevertheless, this bank seems well-managed to minimize any adverse risk during the pandemic, and it needs to boost this sustainability rating to stay ahead of its competition.

Unnamed: 0	Value
Social score	14.37
Peer count	172
Governance score	11.16
Total esg	27.15
Highest controversy	3
ESG performance	AVG_PERF
Percentile	52.39
Peer group	Banks
Environment score	1.62

Source: Yahoo Finance.

Price Target

This due diligence stock pricing target chart has a nice trending story. As market analysts keep dropping their price targets for Bank of America, the current stock price is starting to exceed those most recent targets. So, do you expect future market analysts to raise their pricing targets in the coming weeks?

Insider Activity

It is shocking to see the amount of selling by the current CEO of Bank of America earlier this year. However, as stock performance strengthens, so do his buying habits, indicating further confidence within the bank where he works.

Date	Shares Traded	Shares Held	Price	Type	Option	Insider	Trade
2022-05-14	15,853.00	2,183,262.00	35.17	Sell	No	MOYNIHAN BRIAN T	-15853.0
2022-05-14	1,189.00	155,784.00	35.17	Sell	No	MOYNIHAN BRIAN T	-1189.0
2022-05-31	50,000.00	350,137.00	nan	Buy	No	MOYNIHAN BRIAN T	50000.0
2022-05-31	6,045.00	344,092.00	36.67	Sell	No	MOYNIHAN BRIAN T	-6045.0
2022-06-14	15,852.00	2,199,114.00	nan	Buy	No	ALMEIDA JOSE E	15852.0
2022-06-14	15,852.00	2,183,262.00	32.05	Sell	No	Mensah Bernard A	-15852.0
2022-07-14	15,853.00	2,199,115.00	nan	Buy	No	Mensah Bernard A	15853.0
2022-07-14	15,853.00	2,183,262.00	32.25	Sell	No	MOYNIHAN BRIAN T	-15853.0
2022-08-14	33,788.00	96,927.00	nan	Buy	No	Bless Rudolf A.	33788.0
2022-08-14	22,433.00	366,525.00	nan	Buy	No	DeMare James P	22433.0
2022-08-14	17,470.00	150,468.00	nan	Buy	No	Koder Matthew M	17470.0
2022-08-14	2,674.00	158,458.00	nan	Buy	No	Mensah Bernard A	2674.0
2022-08-14	15,852.00	2,199,114.00	nan	Buy	No	MOYNIHAN BRIAN T	15852.0
2022-08-14	2,323.00	364,202.00	36.25	Sell	No	Bless Rudolf A.	-2323.0
2022-08-14	9,661.00	140,807.00	36.25	Sell	No	DeMare James P	-9661.0
2022-08-14	1,189.00	157,269.00	36.25	Sell	No	Koder Matthew M	-1189.0
2022-08-14	15,852.00	2,183,262.00	36.25	Sell	No	Mensah Bernard A	-15852.0
2022-08-14	16,303.00	80,624.00	36.25	Sell	No	MOYNIHAN BRIAN T	-16303.0
2022-08-31	1,799.00	82,423.00	nan	Buy	No	MOYNIHAN BRIAN T	1799.0
2022-08-31	1,799.00	80,624.00	33.47	Sell	No	MOYNIHAN BRIAN T	-1799.0
2022-09-13	4,529.00	4,529.00	nan	Buy	No	MOYNIHAN BRIAN T	4529.0
2022-09-14	15,852.00	2,199,114.00	nan	Buy	No	Koder Matthew M	15852.0
2022-09-14	15,852.00	2,183,262.00	34.51	Sell	No	Koder Matthew M	-15852.0
2022-10-14	15,852.00	2,199,114.00	nan	Buy	No	Bless Rudolf A.	15852.0
2022-10-14	15,852.00	2,183,262.00	31.7	Sell	No	MOYNIHAN BRIAN T	-15852.0