U.S. markets closed
  • S&P 500

    3,819.72
    -50.57 (-1.31%)
     
  • Dow 30

    31,270.09
    -121.43 (-0.39%)
     
  • Nasdaq

    12,997.75
    -361.04 (-2.70%)
     
  • Russell 2000

    2,207.79
    -23.72 (-1.06%)
     
  • Crude Oil

    61.06
    +1.31 (+2.19%)
     
  • Gold

    1,709.30
    -24.30 (-1.40%)
     
  • Silver

    26.18
    -0.70 (-2.60%)
     
  • EUR/USD

    1.2067
    -0.0020 (-0.17%)
     
  • 10-Yr Bond

    1.4700
    +0.0550 (+3.89%)
     
  • GBP/USD

    1.3953
    -0.0004 (-0.03%)
     
  • USD/JPY

    106.9970
    +0.2870 (+0.27%)
     
  • BTC-USD

    50,732.54
    +3,171.19 (+6.67%)
     
  • CMC Crypto 200

    1,014.87
    +26.77 (+2.71%)
     
  • FTSE 100

    6,675.47
    +61.72 (+0.93%)
     
  • Nikkei 225

    29,559.10
    +150.93 (+0.51%)
     

Increase in Trading Revenues to Support BofA (BAC) Q4 Earnings

  • Oops!
    Something went wrong.
    Please try again later.
Zacks Equity Research
·3 min read
  • Oops!
    Something went wrong.
    Please try again later.

Similar to the first nine months of 2020, Bank of America’s BAC trading revenues (constituting a substantial portion of its total revenues) are expected to have witnessed significant improvement in the fourth quarter. Thus, solid trading performance is expected to support the bank’s overall results, scheduled to be announced on Jan 19, before market open.

The lingering concerns related to the impact of the pandemic along with other major developments like the U.S. Presidential elections and the vaccine breakthroughs led to a continued significant rise in market volatility in fourth-quarter 2020. Along with significant volatility, client activity remained strong. Thus, BofA’s trading business is expected to have received a substantial boost in the to-be-reported quarter.

Unlike the first half of the year, when almost all major indexes like the S&P 500, Dow Jones and Nasdaq witnessed a roller coaster ride, swinging from highs to record lows; the fourth quarter mainly witnessed an upswing in equity markets, with the indexes touching new highs. Along with impressive equity markets performance, fixed income trading remained strong, driven by the Federal Reserve’s bond-buying program. Hence, BofA’s equity as well as fixed-income trading revenues is expected to have improved in the fourth quarter.

The Zacks Consensus Estimate for equity trading revenues for the to-be-reported quarter is pegged at $1.12 billion, which suggests an increase of 10.3% from the prior-year quarter’s reported number. Likewise, the consensus estimate for fixed-income trading revenues of $1.95 billion indicates a year-over-year rise of 11%.

The consensus estimate for total trading revenues is pegged at $3.07 billion, suggesting a year-over-year rise of 10.7%.

Overall Earnings & Revenue Growth Expectations

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 56 cents, which suggests a decline of 24.3% from the year-ago reported number.

The consensus estimate for sales of $20.40 billion indicates an 8.7% decline from the year-ago quarter’s reported number.

Bank of America Corporation Price and EPS Surprise

 

Bank of America Corporation Price and EPS Surprise
Bank of America Corporation Price and EPS Surprise

Bank of America Corporation price-eps-surprise | Bank of America Corporation Quote

Now, let’s check what other key factors are likely to have influenced BofA’s overall performance in the fourth quarter.

Conclusion

Impressive trading business performance, driven by significant market volatility, and solid investment banking performance are expected to have offered support to this Zacks Rank #3 (Hold) stock’s top-line growth in fourth-quarter 2020. However, its interest income is likely to have been negatively impacted by muted loan growth and low interest rates.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Release Dates of Other Major Banks

State Street Corporation STT and The Bank of New York Mellon Corporation BK are scheduled to release quarterly results on Jan 19 and Jan 20, respectively. KeyCorp KEY will release numbers on Jan 21.

Zacks Names “Single Best Pick to Double”

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.

Free: See OurTop Stock and 4 Runners Up >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Bank of America Corporation (BAC) : Free Stock Analysis Report
 
The Bank of New York Mellon Corporation (BK) : Free Stock Analysis Report
 
State Street Corporation (STT) : Free Stock Analysis Report
 
KeyCorp (KEY) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research