Bank of America Corporation
) hit a new 52-week high, touching $15.30 in the first half of
the trading session on Nov 19. However, the stock closed the
session at $15.20, which reflects a solid year-to-date return of
26.7%. The trading volume for the session was 160.6 million
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Despite the strong price appreciation, this Zacks Rank #3 (Hold)
banking giant has considerable upside left, given its positive
estimate revision over the last 30 days and expected
year-over-year earnings growth of 8.25% for 2013.
BofA's impressive price performance reflects strong third-quarter
2013 results comprising a positive earnings surprise of 11.1%.
Additionally, the company continues to strengthen its balance
sheet position as reflected in its improved capital ratios.
On Oct 16, BofA declared third-quarter earnings of 20 cents per
share, beating the Zacks Consensus Estimate of 18 cents. Results
were aided by substantial reduction in the provision for credit
losses and lower non-interest expenses.
Non-interest expenses were $16.4 billion, down 7% from $17.5
billion in the year-ago quarter. Though BofA has been
continuously facing litigations, its cost containment program is
helping it manage the legal expenses to a large extent.
Provision for credit losses decreased 83% year over year to $296
million. As of Sep 30, 2013, nonperforming loans, leases and
foreclosed properties ratio was 2.17%, down 64 bps year over
Moreover, BofA has delivered 3 positive earnings surprises in the
last 4 quarters with an average beat of 30.13%.
Estimate Revisions Show Potency
In the last 30 days, the Zacks Consensus Estimate for 2013
increased 1.1% to 90 cents per share. However, for 2014, the
Zacks Consensus Estimate remained unchanged at $1.33 per share
over the same time frame.
Better performing major regional banks worth considering include
Fifth Third Bancorp
). All these stocks carry a Zacks Rank #2 (Buy).