Bank of America (BAC) is expected to report Q3 earnings before the market open on Friday, October 16, with a conference call scheduled for 9:30 am ET.
Guidance
The consensus estimate is (7c) for EPS and $27.71B for revenue, while the consensus range for EPS is (33c)-8c and $25.60B-$30.05B, according to First Call. Investors will be listening for information about the search for a new CEO. Current CEO Kenneth Lewis announced last month that he was stepping down by year's end. Several institutional investors have reportedly urged BofA to consider external candidates. However, the bank is considering two internal candidates, the Wall Street Journal reported: Chief Risk Officer Gregory Curl and Brian Moynihan, the bank's consumer and small business banking chief. BofA is also dealing with the legal ramifications from its takeover of Merrill Lynch last year, and some have questioned whether the bank did enough to inform its shareholders about Merrill's losses. On a positive note, some of the bank's investors may be encouraged by the much better than expected results announced by J.P. Morgan (JPM), although most of their profits came from trading activities. But J.P. Morgan CEO Jamie Dimon said he was "seeing some initial signs of consumer credit stability." Also, Citigroup (C) today reported a smaller than expected Q3 loss.
Analyst Views
Wells Fargo recently upgraded BofA to Outperform from Market Perform, with a target range of $24-$27. The firm wrote that BofA was trading "at a deep discount to peers." Wells Fargo noted that BofA was trading at a 1.5x price to total book value ratio, a 17% discount to the average of the large cap regional banks they cover.
