Today’s News: Bank of America (BAC) reported a big second-quarter earnings beat this morning.
Bank of America (BAC – yield 2.1%) reported second-quarter diluted earnings per share (EPS) of $0.63 this morning, above all analysts’ estimates. The consensus estimate was $0.57, which had come down from $0.60 a week ago. The range of estimates was $0.54 to $0.61, which had come down from $0.54 to $0.66 a week ago.
Revenue of $22.6 billion beat the consensus estimate of $22.3 billion. The company confirmed its intention to raise its third-quarter dividend payout by 3 cents to 15 cents per share, a 25% increase.
Prior to today’s report, Wall Street expected Bank of America to grow profits by 34.1% and 16.5% in 2018 and 2019. The 2018 number will likely be tweaked upward after today’s good quarterly report.
Bank stocks have been weak in recent months. Today’s good news could turn the share price around, beginning a push toward 2018 highs in the 32-33 range. I prefer to sell BAC near 2018 highs in order to make room for a smaller bank in the Cabot Undervalued Stocks Advisor portfolios, due to expectations of increased M&A activity within the sector in the coming year. Hold.
Please note that the following Strong Buy-rated portfolio stocks appear immediately capable of rising 10% or more:Skechers USA (SKX)
Southwest Airlines (LUV)
Universal Electronics (UEIC)