Bank of America Reports Mixed Q2 Results, Analyst Remains Constructive
2022.07.18 16:10
Bank of America (BAC) Reports Mixed Q2 Results, Analyst Remains Constructive
By Senad Karaahmetovic
Shares of Bank of America (NYSE:BAC) are down nearly 1% after the bank reported mixed second quarter results.
BAC reported Q2 EPS of 73c, while analysts were looking for 75c per share. Revenue stood at $22.7 billion at the end of the quarter, compared to the analyst consensus of $22.72 billion.
The bank reported trading revenue excluding DVA of $4 billion, up 11% YoY, and compared to the consensus projection of $4.01 billion. FICC trading revenue excluding DVA was reported at $2.34 billion, up 19% YoY and above the expected $2.29 billion.
Equities trading revenue excluding DVA stood at $1.66 billion, up 1.5% YoY and below the estimated $1.72 billion. Wealth and investment management total revenue came in at $5.3 billion, in line with the consensus estimates. BAC generated $1.13 billion in investment banking revenue, missing the expected $1.31 billion.
“As we enter the second half of the year, we believe we are well-positioned to deliver for our shareholders while continuing to invest in our people, businesses and communities,” said Bank of America’s CEO Brian Moynihan.
“Solid client activity across our businesses, coupled with higher interest rates, drove strong net interest income growth and allowed us to perform well in a weakened capital markets environment.”
The banks also said it expects earnings generation over the next 18 months to “provide ample capital to support growth, pay dividends, buy back shares and continue to invest in our people, platforms and communities as we grow into new regulatory capital level requirements.”
Goldman Sachs analyst Richard Ramsden reiterated a Buy rating and a $39 per share price target.
“We expect a reasonably constructive response to these results, and based on peers that have reported so far, the focus to be on the trajectory for NII in 2H22, how they think about capital return and managing RWA, in light of the higher SCB, the provision outlook and updated thoughts on the macro environment, and sustainability of fee revenue (in particular capital markets),” Ramsen told clients in a note.
