Bank of America (BAC) CEO Brian Moynihan is dialing back his expectation for a mild recession this year, mostly thanks to the resilience of the US consumer.
"People are working, and they are getting paid more, and they are spending," the longtime leader of BofA told Yahoo Finance Live on Tuesday. "It's going to be hard to have a tough US economy because of the amount that is driven by that [spending]."
Moynihan pointed out that his research team sees a "light" recession in the first half of 2024. And given that it will be "light," the economy won't feel like it's in a recession.
"In a broad context across 60 million customers, across $4 trillion of spending, it's a pretty resilient group," Moynihan added.
The upbeat tone came after BofA largely delivered the goods for investors in the second quarter.
Net income was up 19% to $7.4 billion compared to the year-earlier period, roughly in line with consensus forecasts. Earnings of $0.88 a share beat analysts' estimates by $0.04.
That's the bottom-line benefit from higher interest rates and another quarter of tight expense control by management.
Revenue rose 11% from the prior year to $25.2 billion, $200 million above consensus estimates. The company also saw above-consensus results in key parts of its business, such as fixed income and equities trading.
On an earnings call with analysts, BofA lifted its net interest income outlook slightly from its prior expectations, citing a healthy consumer and modest loan growth.
"That's really because of the power of our franchise," Moynihan told Yahoo Finance Live.
The guidance lift and quality of the quarter sent Bank of America stock higher by 4.1% near the close of trading. BofA's ticker page was the third most active on the Yahoo Finance platform.
Evercore ISI banking analyst Glenn Schorr said the quarter was "pretty good," and left his Outperform rating on BofA's stock.
Others on the Street agreed.
"The fact that the stock is quite cheap (at just 8.7x forward earnings)…sports a nice 3% dividend yield…and has a strong management team…are very good reasons for those who are bullish on the banking sector to take a hard look at Bank of America in the days and weeks ahead," Miller Tabak chief market strategist Matt Maley pointed out in a client note.
Yahoo Finance's David Hollerith contributed to this story.
Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations, or anything else? Email brian.sozzi@yahoofinance.com.
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