Bank of America Reports Mixed Q2 Results, Shares Fall 3%

Bank of America (BAC) shares fell 2.51% after the company reported mixed second-quarter financial results. The financial services company reported net income of $9.2 billion or $1.03 a share, better than the $0.77 a share that analysts expected.

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Revenue came in at $21.5 billion, down 4%, and fell short of the consensus estimate of $21.83 billion. Net interest income was also down 6% to $10.2 billion, attributed to lower interest rates. Deposits in the quarter were up 14% to $1.9 trillion. (See Bank of America stock charts on TipRanks)

“We delivered solid earnings and returned more capital to shareholders during the quarter as we moved to a more open economy. Our team continued to do a great job serving clients, as shown by the increased levels of client activity across all of our businesses,” said CEO Brian Moynihan.

Yesterday, Oppenheimer analyst Chris Kotowski reiterated a Buy rating on the stock with a $49 price target, implying 26.1% upside potential to current levels. According to the analyst, the bank is well-positioned to grow after reporting mixed second-quarter financial results.

Kotowski stated, “Low rates and sluggish loan growth kept 2Q21 comparisons pretty flat, but we do think the numbers support the view that we’ve hit bottom in both volumes and revenues and will grow from here. For BAC, the trough in NII was 3Q20, and while the prior goal of $1B higher NII by 4Q21 is a stretch, the trend should be up.”

Consensus among analysts is a Moderate Buy based on 9 Buys and 4 Holds. The average Bank of America price target of $44.65 implies 14.9% upside potential to current levels.

BAC scores a 9 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.