Shares of Bank of America Corp. (
) are ticking lower Monday ahead of it's third-quarter earnings
Ahead of the bell Tuesday, BofA is expected to report earnings of
20 cents per share on revenue of $25.95 billion. The number would
be a drop from 33 cents reported last quarter, and a 26 percent dip
from earnings of 27 cents per share reported in the same period
To no one's surprise, BofA, like other financials, had a rough
quarter. Shares dropped 44 percent to $6.12 at the end of
September. BofA's stock price is down slightly since, and off 54
percent in 2011. BofA has traded within a range of $5.13 to $15.31
over the last 52-week period.
BofA trades at 5.4x fiscal 2012 earnings expectations, compared
with 6.0x for Citigroup (
), 7.4x at Wells Fargo (
), and 6.0x for J.P. Morgan (
The most recent quarterly data pegs BofA with a book value of
$20.30 per share, and tangible book value of $12.65 per share.
Data from Bloomberg has 16 analysts at Buy on BofA, 20 with a Hold,
and two suggesting to Sell. The Street price target average is
$10.40, with a low of $6.50 and high of $18.00.
Don't forget Warren Buffett's
$5 billion bet
made in late-August, and BofA's plans to trim its workforce by
in an effort to streamline operations.
- Keefe, Bruyette, & Woods is modeling for earnings of 18
cents per share. KBW is cautious into the quarter, saying, "The
economy is our chief risk as BofA's consumer-laden book is
affected by the unemployment rate. BofA has largely addressed its
capital needs, but regulatory risks still exist for BofA.
Finally, financial regulation continues to evolve, which could
significantly alter our forward estimates and resulting price
- JPMorgan is modeling for EPS of 13 cents, as capital markets
related revenue was very weak in the thirdquarter, particularly
in trading and investment banking, and down especially sharply in
the higher risk areas. JPMorgan says BofA has "relatively
attractive valuation, potential for significant appreciation when
earnings normalize and position with a leading retail and
commercial core franchise in the US. This is partly offset by
ongoing headline risk from mortgage related issues, pressure on
revenues from consumer related sources given recent slowdown in
US economy, uncertain political and regulatory environment, weak
and volatile trading environment, and decline in capital markets
- Wells Fargo sees earnings of 29 cents per share. "We believe
that Q3's results will benefit from divestitures announced during
the quarter, most notably the firm's sale of 51 percent of its
CCB stake, which is expected to generate $8.3 billion in cash
proceeds and an after-tax gain on sale of $3.3 billion (or
$0.32), but is likely to be partially offset by a $1.2 billion
loss on the sale of its stake in HCA and continued (but sharply
lower) elevated mortgage-related costs."
Investment banking fees are expected to be 49 percent
sequentially due to a "broad-based plunge in deal completions,
most notable in ECM due to turbulent market conditions."
Stay tuned to StreetInsider.com's
section to see our analysis of the highly-anticipated quarterly
results within seconds of their release. You can also check out
BofA's past performance at Streetinsider's
BofA Income Statement