Shares of Bank of America are down over 3% in early morning trading after the bank’s 3Q revenues of $20.3 billion fell slightly short of analysts’ estimates of $20.8 billion. Meanwhile, 3Q EPS of $0.51 per share was slightly above the Street consensus of $0.49.
Bank of America’s (BAC) revenues declined 11% year-over-year. Net interest income (NII) fell 16.9% to $10.1 billion, due to lower interest rates. Analysts had estimated NII of $10.24 billion. Non-interest income declined 4% to $10.2 billion year-over-year, reflecting lower consumer fees. Non-interest expense decreased 5% to $14.4 billion during the same period.
In 3Q, the provision for credit losses increased to $1.4 billion from $779 million, but came in below Street expectations of about $1.9 billion. Bank of America’s loan and lease balances rose 3% to $950 billion year-over-year, while deposits increased 23% to $1.7 trillion. (See BAC stock analysis on TipRanks)
Following the earnings, Oppenheimer analyst Chris Kotowski said that “BAC has generally had strong expense control in recent years, and we expect they will rebalance this in coming quarters.” Thus, Kotowski maintained a Buy rating with a price target of $37 (51.9% upside potential).
Currently, the Street has a bullish outlook on the stock. The Strong Buy analyst consensus is based on 5 Buys and 1 Hold. The average price target of $29.42 implies upside potential of about 20.8% to current levels. Shares have declined about 31% year-to-date.