Why Have Bank of America Corp (NYSE:BAC) Shares Fallen 5% Today? When will the slide stop?


It’s hard to believe that shares of Bank of America Corp (NYSE:BAC) are down close to 5% in morning trading today. In fact, the stock has set a new 52-week low, down significantly from its 1-year high of $18.48. However, this isn’t a stock that typically sees much fluctuation in any given week, so a loss of 5% in a few hours is certainly something to call home about.

Part of today’s drop has something to do with the market as a whole taking a plunge, particularly financial stocks which are not reacting well to both oil prices and the increasing of the fed funds rate. There is also renewed talks of a possible recession that could lurking. The bank itself has admitted that the U.S. may already be in a recession. The oil fears, however, don’t seem to be warranted as Bank of America Corp (NYSE:BAC)’s oil holdings only represent a small portion of their business. The Fed’s rate hike and future rate hikes that are expected are playing a larger role in this move.

The only question that we have is, “Will this overall banking fall bounce back, or is this itself a correction of overpriced stocks?

Only time will tell.

The stock is down 4.94% or $0.64 following the news, hitting $12.31 per share. Approximately 17.28 million shares traded hands. BAC shares have declined 23.96% since July 2, 2015 and are currently downtrending. It has underperformed the S&P500 by 14.48%.

From a total of 19 analysts covering Bank of America (NYSE:BAC) stock, 14 rate it a “Buy”, 0 a “Sell”, and 5 a “Hold”. This means that 74% of the ratings are positive. The highest target price is $21 while the lowest target price is $15. The mean of all analyst targets is $18.62 which is 51.26% above today’s ($12.31) stock price. Bank of America was the topic of 35 analyst reports since July 21, 2015 according to the firm StockzIntelligence Inc. CLSA upgraded shares on January 29 to a “Outperform” rating. Robert W. Baird upgraded shares to a”Neutral” rating and a $18.0 target share price in their report from an August 25. Deutsche Bank maintained BAC stock in a recent report from January 26 with a “Buy” rating. Bernstein upgraded the rating on August 25. Bernstein has a “Mkt Perform” rating and a $19.0 price target on shares. Finally, Jefferies maintained the stock with a “Buy” rating in a report they issued on an October 7.

The institutional sentiment increased to 1.33 in Q2 2015. It’s up 0.32, from 1.01 in 2015Q2. The ratio is positive, as 82 funds sold all their Bank of America Corp shares they owned while 453 reduced their positions. 122 funds bought stakes while 590 increased their total positions. Institutions now own 6.30 billion shares which is 0.74% less than the previous share count of 6.35 billion in 2015Q2.

Mizuho Bank Ltd. holds 56.87% of its total portfolio in Bank of America Corp, equating to 31.25 million shares. Boyle Capital Management Llc owns 1.88 million shares representing 38.47% of their total US portfolio. Moreover, Daily Journal Corp has 28.98% of their total portfolio invested in the company, equating to 2.30 million shares. The Netherlands-based Rabobank Nederland Fi has a total of 27.83% of their portfolio invested in the stock. First Trust Bank Ltd., a Bahamas-based fund reported 380,720 shares owned.

Bank of America Corporation is a bank holding firm and a financial holding company. The company has a market cap of $125.28 billion. The Firm is a financial institution, serving individual consumers, small- and middle-market businesses, institutional investors, firms and Governments with a range of banking, investing, asset management and other financial and risk management services and products. It has 9.55 P/E ratio. Through its banking and various nonbank subsidiaries, it provides a range of banking and nonbank financial services and products.