Bank of America (BAC) Q2 Results 'Mixed,' Outlook Positive - Evercore
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Rating Summary:
27 Buy, 17 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 4 | Down: 9 | New: 7
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Evercore Partners analyst Andrew Marquardt provided an early read of Bank of America (NYSE: BAC)'s Q2 results.
The analyst noted the $.32 headline EPS number included several specials that net added $0.06/share. This brings "core" EPS closer to $0.26 which compares to their estimates and the consensus of $0.25. The beat was driven by lower credit costs while core rev a bit light on fees while core spread in line and core expenses in line.
Marquardt said overall the results were "mixed." He noted "good core expense control and core spread/NIM stable, while fees more mixed on FICC trading results down YoY (vs up meaningfully for C/JPM/GS) but equities better up meaningfully YoY, IB results better than expected, similar to peers. Balance sheet a bit lower than expected, but core loans were flattish with strong comm'l growth offset by declining consumer. Capital improved with T1C B3 9.6% (vs 9.52% last qtr) but TBV lower to $13.32 (vs $13.36) likely due to AOCI."
The analyst also said Outlook commentary appears net positive at accelerated expense target around LAS to now expect run rate costs of $2b by end '13 (vs prior guidance of $2.1b), NII should build over time from core $10.4b, NCOs under $2b vs $2.1b this qtr, and mortgage activity to slow (not unexpected).
He said the stock reaction is likely to be modestly positive.
The firm maintained an Overweight rating and price target of $15.
For an analyst ratings summary and ratings history on Bank of America click here. For more ratings news on Bank of America click here.
Shares of Bank of America closed at $13.92 yesterday.
The analyst noted the $.32 headline EPS number included several specials that net added $0.06/share. This brings "core" EPS closer to $0.26 which compares to their estimates and the consensus of $0.25. The beat was driven by lower credit costs while core rev a bit light on fees while core spread in line and core expenses in line.
Marquardt said overall the results were "mixed." He noted "good core expense control and core spread/NIM stable, while fees more mixed on FICC trading results down YoY (vs up meaningfully for C/JPM/GS) but equities better up meaningfully YoY, IB results better than expected, similar to peers. Balance sheet a bit lower than expected, but core loans were flattish with strong comm'l growth offset by declining consumer. Capital improved with T1C B3 9.6% (vs 9.52% last qtr) but TBV lower to $13.32 (vs $13.36) likely due to AOCI."
The analyst also said Outlook commentary appears net positive at accelerated expense target around LAS to now expect run rate costs of $2b by end '13 (vs prior guidance of $2.1b), NII should build over time from core $10.4b, NCOs under $2b vs $2.1b this qtr, and mortgage activity to slow (not unexpected).
He said the stock reaction is likely to be modestly positive.
The firm maintained an Overweight rating and price target of $15.
For an analyst ratings summary and ratings history on Bank of America click here. For more ratings news on Bank of America click here.
Shares of Bank of America closed at $13.92 yesterday.
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