CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
This was not BAC’s best quarter with flat growth Y/Y in net interest income (NII), total loans, and total deposits, but investment banking and wealth management were better. We raise our target by $3 to 38 on a forward P/E of 11.7x, near the three-year historic average at 11.5x. We lower our ’24 EPS view by $0.05 to $3.25 and keep ’25’s unchanged at $3.40. BAC posted Q1 EPS of $0.76, $0.01 below consensus. Our revenue forecast is $100.5B in ’24 and $103.2B in ’25. In Q1, noninterest expense was 6% Y/Y higher with compensation expense up 3%, despite a 1.7% decline in total net revenue. Consumer revenue was -5% Y/Y with flat credit card income. In Global Banking, investment banking fees were +27% Y/Y, business lending +3%, and global transaction services -13%. Global Wealth & Investment Management realized +5% Y/Y growth despite flat NII, and $3.34T total AUM was +13% with net client flows +$24.6B. Net interest margins were 1.99% (2.20%). We think NII (54% of total revenue) may improve in ’24 with loan growth.