Monday, March 5, 2012

Has Bank of America's surge ended?

Bank of America's surging stock has cooled in the past few weeks -- and its rapid growth may now have come to an end, analysts with investment firm Stifel Nicolaus say in a research note today.

The Charlotte bank started the year on a torrid pace. After finishing 2011 as the Dow Jones Industrial Average's worst performer, the bank quickly became the index's leader and had grown nearly 50 percent for the year.

While the bank's stock is still up more than 40 percent on the year, it's been relatively flat over the past month. On Monday afternoon, the stock was at $7.97, the same price it closed at Feb. 6.

The Stifel Nicolaus analysts note that the stock has stagnated since breaking $8 a share in early February. They attributed the early-year rise to a calm in investor fears that the bank would have to issue more stock to raise capital.

They say the bank's future stock price will be driven by earnings power, which the bank has struggled with in the past few quarters. While it reported profitability in 2011 and in the fourth quarter, the figures were clouded by a number of one-time gains and losses.

"With capital levels seemingly no longer the primary issue, we think it will be harder for the shares to outperform in the face of what we believe are lower earnings expectations that are forthcoming," the analysts wrote.

9 comments:

Anonymous said...

50% of crap is still crap.

Anonymous said...

It hasn't been flat at all. it was $8.14 last week. i bet there stock is a lot safer bet than a certain news source's stock

Anonymous said...

Why do you all the Bank so much?

Anonymous said...

Why do yoou all Hate the Bank so much? It is a corporation and they need to make money to survive just like everyone else.

Ghoul said...

I would love to see a report on the McClatchy stock. It was at $79.60 on April 17, 2006, today it sits at $2.60. On Dec 5th, 2011 it was at $1.16. Yet the CEO, Gary Pruitt, has consistently made $3-4 million every year overseeing the running a company into the ground, all the while, laying off 4500 people.

Anonymous said...

I was shocked it took this long today for these prized journalist to come up with another BOA attack!!

Anonymous said...

"Surge" at $8 per share?

BofA stock is currently selling at $8 per share. It's lost $42 per share compared to the $50 price for a share 5 years ago today, March 5 2007.

Anonymous said...

they bash banking daily on here.....

do they understand what can happen to BAC stock if the fed's MOU is lifted?

I'm guessing they don't understand what I just said.....

and yes, I am long BAC

Anonymous said...

"they bash banking daily on here....." - it is funny that they do not bash all banks but only BAC routinely!
Must be out of newsworthy news