The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.
On Wednesday 15 October, Bank of America is due to post its third-quarter figures. Markets are expecting the adjusted earnings per share to fall from 41 cents down to 31.9 cents. Sales will also be slightly lower at $21.347, down from $21.96. Of the last ten quarterly figures posted, Bank of America has beaten expectations nine times.
Considering Bank of America had to settle a $16.65 billion bill with US regulators over its mis-selling of mortgage backed securities, the performance of the shares has been impressive. From the start of the year the shares at $16.59 are now 6.4% higher and over the course of the last 12 months the shares are up a total of 18.25%.
One area where Bank of America has benefited is the upturn in investment banking expenditure. This shift in corporate mindset has come about as companies decided to move out of the defensive attitude and looked to catch up on the last five years of stagnation. The upturn in corporate activity has helped contribute to sales jumping by over 12%, and maintain its position as the world’s second largest market share in investment banking.
The recent selloff in equity markets has seen the bank’s shares drift down ever closer to both their 50- and 200-day moving averages, and around the $16.25 level this might entice value investors back in.