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NYSE:BAC

Bank of America (BAC)

56.25
+0.05 (0.09%)
as of Jun 18, 2026, 10:42:05 pm Market Open.
492 watching
0
WAIT
There is a lot of reasons why they should win relative to their peers -- wealth management and potential into Europe. The problem is interest rates are not cooperating. They have large free balances on savings and trading deposits, making them very sensitive to rate declines. He would wait for a time when there is more clarity on the direction of these rates.
COMMENT
Time to add on? A big and steady US bank -- you can expect continued performance from them. They will work their way through the flat interest rate environment. This is not an expensive stock, pays a good dividend, and has a good ROC. Yield 2.5%
DON'T BUY
It comes down to the direction of interest rates. He feels they will go lower, and the U.S. may even go negative. This will hurt the banks--look at Europe now.
HOLD
We’ve seen cyclical areas of the market, like consumer and banks, really moved on that notion. If the Fed is able to engineer a steeper yield curve, this will help BAC. Thinks that you can hold this long, and he doesn’t think it will tank. (Analysts’ price target is $35.00)
DON'T BUY
The US banks reacted well to Powell's rate cut today, but a lower rate in general means the banks will struggle with shrinking margins. BAC is the most levered to interest rates, so you don't want to own this. He sold his shares over the winter when the Fed changed direction.
COMMENT

He likes the US banks and prefers JPM, but they're all hamstrung in what they can do and acquire. They will increase dividends and buyback shares. Earnings growth will come from committing their profits to share buybacks. BAC enjoys quality earnings. Debt is fine. Sinking interest rates will squeeze their margins, but they have other businesses outside lending to offset that.

HOLD
The challenge is this is a very low interest rate environment and that makes it tough for banks to make money. If you expect interest rates to return to normal yields, this would be a good entry level. He would not be selling here -- continue to hold.
COMMENT
The financials are a little frothy. If he was a trader, he would sell at $30. If you are long term, would hold it. It is no longer a volatile trader, but it is range bound in a $5 range.
WEAK BUY

Same thoughts as with Citibank today. Expect challenges in this space. A lot of recessionary concerns have been priced into US banks but are overdone. You could add a little at current levels.

SELL

He sold it on tightening of the federal reserve last fall. This is the most exposed bank to falling interest rates. He still owns C-N because there is more upside on it. (Analysts’ price target is $32.71)

BUY
He might buy it soon. He likes it a lot. Has a PE of 9x. Well-run and a good dividend. The yield curve is a problem, but banks will find another way to charge customers. Banks don't lose.
PAST TOP PICK
(A Top Pick Aug 30/18, Down 14%) US banking is very cheap, lots of capital. Can't compare them to European banks. Great story, buying probably at or below book value. Dividend of 2.1% and increasing. Buying back shares. Good chance to get in.
TOP PICK
Low multiple. Net interest rate income is lower, but won't collapse. Great franchise. Below book value, good yield, no legal issues, tons of capital. Yield is 2.74%. (Analysts’ price target is $33.08)
COMMENT

Canadian vs. American banks (BAC, JPM) The Canadians trade at a premium (in book and PE terms) vs. Americans, and the 12-month outlook is better for Americans. BAC is cheaper than JPM and more domestically focused. Also, Citibank is cheaper than both of these, trading below book value with better protection to the down side.

WAIT
BAC vs. MET. Dynamics of the two are different, so hard to compare. FMV potential of both is huge. But the market won't go, because interest rates are falling. Aren't any drivers to escalate earnings. Very cheap, but who knows when they're going to pop? (Analysts’ price target is $33.12)
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