Bank of America shares close higher on Tuesday, first-quarter earnings exceed estimates as loan growth, cost cuts support

Bank of America Corp’s (BAC) first-quarter profit, reported on Tuesday, topped Wall Street estimates, as loan growth and lower expenses mitigated a slump in trading revenue.

Bank of America shares closed higher for the ninth time in the past fourteen trading sessions in New York on Tuesday. The stock edged up 0.13% ($0.04) to $29.88, after touching an intraday low at $29.00, or a price level not seen since April 11th ($28.99).

Shares of Bank of America Corporation have risen 21.27% so far in 2019 compared with a 15.96% gain for the benchmark index, S&P 500 (SPX).

In 2018, Bank of America’s stock went down 16.53%, thus, it underperformed the S&P 500, which registered a 6.24% loss.

The banks revenue, net of interest expense, remained little changed at $23 billion during the first quarter compared to Q1 a year earlier. It also fell short of the median analyst estimate of $23.30 billion.

Lending to individuals registered a 3% annual growth during the first quarter, while lending to corporate clients grew 4% year-on-year, the bank said. Average deposits grew 5% year-on-year to $1.36 trillion during the quarter.

Similar to its Wall Street peers, Bank of Americas trading revenue plummeted 17% year-on-year during the first quarter, hurt by lower market volatility and the longest US government shutdown. Revenue from equity trading shrank 22% year-on-year to $1.2 billion, while revenue from fixed income, currency and commodity trading went down 8% year-on-year to $2.4 billion.

Bank of Americas non-interest expenses shrank 4.5% year-on-year to $13.2 billion during the first quarter.

Meanwhile, net income attributable to shareholders was reported to have surged 6% year-on-year to $6.87 billion.

The banks earnings per share, which exclude special items, went up to $0.71 during the first quarter from $0.62 in the year-ago period. In comparison, analysts on average had anticipated adjusted earnings of $0.66 per share.

Bank of America also said its net interest income had increased 5% year-on-year to $12.38 billion during the past quarter.

According to CNN Money, the 27 analysts, offering 12-month forecasts regarding Bank of America Corp’s stock price, have a median target of $33.00, with a high estimate of $42.00 and a low estimate of $28.00. The median estimate represents a 10.44% upside compared to the closing price of $29.88 on April 16th.

The same media also reported that 14 out of 30 surveyed investment analysts had rated Bank of America Corp’s stock as “Buy”, while 11 – as “Hold”.

Weekly Pivot Levels

By using the traditional method of calculation, the weekly levels of importance for Bank of America Corporation (BAC) are presented as follows:

Central Pivot Point – $29.71
R1 – $30.68
R2 – $31.19
R3 – $32.16
R4 – $33.13

S1 – $29.20
S2 – $28.23
S3 – $27.72
S4 – $27.21