This was a development that was, sadly, only too likely to happen. Bank stock Bank of America (NYSE:BAC) offered up some numbers on charge-offs and delinquencies for credit card users, and the numbers weren’t exactly encouraging. In fact, they’re on the rise, and that in turn sent Bank of America shares on the decline, down over 1.5% in Friday afternoon’s trading.
Given the state of the numbers, it’s hard not to be concerned. Rates for over-30 days delinquent accounts rose from 1.37% in October to 1.41% in November. That’s still below the previous peak of 1.63 back in November 2019, but still on the rise. Moreover, charge-offs were up as well, going from 2.06% in October to 2.24% in November. Again, still below the pre-pandemic high of 2.6%, but again, on the rise. Meanwhile, bank lending rates remained flat, with the master trust average loan figure coming in at $13.6 billion. That’s down 1.5% from $13.8 billion in November 2022.
A Contrarian Play With Room to Run
For those wondering if Bank of America is a good play in an environment such as the one we’re seeing right now, well, there are certainly some points in its favor. Reports note that Bank of America is frantically ramping up its availability of branches. That’s something not ordinarily seen in banks these days; most banks are folding up their branches in favor of far cheaper online banking alternatives that don’t require real estate, staffing, or physical plant management. In fact, in 2023, Bank of America opened up 55 branches in 34 different markets. Good by itself, but it’s actually building on earlier gains; it added another 58 branches back in 2022.
What is the Target Price for Bank of America Stock?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on BAC stock based on nine Buys, seven Holds and one Sell assigned in the past three months, as indicated by the graphic below. After a 8.96% rally in its share price over the past year, the average BAC price target of $55.23 per share implies 3.42% upside potential.
