Bank of America CEO: 2023 NII Outlook Raised to 6-8%
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
Speaking at the Bernstein Strategic Decisions Conference, Bank of America Chairman and CEO Brian Moynihan said in response to a question about updates in terms of the near outlook: "You know I think if you look at us for this quarter, just to give you a sort of an update, I'd say the NII we told you what would happen in the extra day and stuff. We feel good about that. We move the range of 5 to 7 for the year up to 6 to 8. We feel good about that. You should expect this quarter will be good and solid on that. On investment banking and trading, we are doing I think trading I think like a 15% increase year over year. You have got to be careful year over year. You've got to remember last year was liberation quarter. So some of these numbers will look big. Investment banking is in pretty good shape. Wealth management in the low teens year over year. So we feel good about that."
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Analyst Views on BAC
Wall Street analysts forecast BAC stock price to rise
19 Analyst Rating
15 Buy
4 Hold
0 Sell
Strong Buy
Current: 50.770
Low
55.00
Averages
61.64
High
71.00
Current: 50.770
Low
55.00
Averages
61.64
High
71.00
About BAC
Bank of America Corporation is a bank holding company and a financial holding company. Its segments include Consumer Banking, Global Wealth & Investment Management (GWIM), Global Banking and Global Markets. Consumer Banking segment offers a range of credit, banking and investment products and services to consumers and small businesses. The GWIM includes two businesses: Merrill Wealth Management, which provides tailored solutions to meet clients' needs through a full set of investment management, brokerage, banking and retirement products and Bank of America Private Bank, which provides comprehensive wealth management solutions. Global Banking segment provides a range of lending-related products and services, integrated working capital management and treasury solutions, and underwriting and advisory services. Global Markets segment offers sales and trading services and research services to institutional clients across fixed-income, credit, currency, commodity, and equity businesses.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- BAA Team Contributions: The Boston Athletic Association (B.A.A.) team raised nearly $450,000 during the event to support its mission of promoting a healthy lifestyle through sports, particularly running, showcasing the positive impact of athletic activities on community engagement.
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- Number of Participating Organizations: The event involved 193 organizations, demonstrating that since its inception in 1989, the Official Charity Program has raised over $675 million, further solidifying Bank of America's leadership in supporting social causes.
- BAA Team Contributions: The Boston Athletic Association (B.A.A.) team raised nearly $450,000 during the event to support its mission of promoting a healthy lifestyle through sports, particularly running, showcasing the positive impact of athletic activities on community engagement.
- Sustainability Initiatives: The B.A.A. Climate Crew raised $87,000 in its second year to support ongoing sustainability initiatives, indicating the organization's commitment to addressing environmental challenges while promoting community development.
See More
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- Market Potential Assessment: Analysts believe Apple is well-positioned in the agentic AI sector, with its robust ecosystem providing a competitive edge, potentially generating $15 billion to $30 billion in AI-related revenue by fiscal 2030, which, while modest relative to Apple's overall revenue, indicates significant growth potential.
- Product Innovation Capability: Apple typically adopts a cautious approach when launching new technologies, innovating on existing models to attract users, as evidenced by the success of the iPhone and AirPods, suggesting it could similarly lead in the AI space.
- User Base Advantage: With over 2 billion devices in circulation, Apple can rapidly deploy new AI features, enhancing user retention and leveraging data to boost network effects, thereby strengthening its market competitiveness.
- Long-term Investment Value: Despite facing tariffs and regulatory scrutiny, Apple's strong customer loyalty and expanding high-margin services segment position it as a solid long-term investment, especially as AI technology matures, with future profit potential looking promising.
See More
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- Analyst Optimism: As Wall Street recognizes Apple's potential in the AI sector, Bank of America analyst Wamsi Mohan raised the stock's price target from $330 to $380, reflecting expectations of $15 billion to $30 billion in future AI revenue, which, while modest compared to Apple's over $400 billion annual sales, indicates significant growth potential.
- Product Innovation Strategy: Apple is not typically the first to market with new technologies, but rather innovates on existing ones, as seen with the success of AirPods and the iPhone, demonstrating a robust strategy that could similarly apply to AI advancements.
- User Base Advantage: With over 2 billion devices in circulation, Apple's vast user base allows for rapid customer reach upon launching new AI features, while also increasing switching costs and enhancing customer loyalty, laying a solid foundation for future AI developments.
- High-Margin Services Growth: Apple is ramping up its high-margin services segment, which is expected to account for a larger share of revenue in the future, further boosting profitability, alongside an impressive 89.5% increase in dividends over the past decade, highlighting its attractiveness as a quality stock.
See More
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- Funding Initiatives: Bank of America announced funding for cultural preservation projects in Montreal and Toronto, notably supporting the restoration of Alice Rahon's 1946 sculpture 'Juggler' at the Montreal Museum of Fine Arts, which is one of only 18 historic artworks globally to receive such a grant, highlighting the firm's commitment to cultural heritage.
- International Conference Sponsorship: As the lead sponsor of the American Institute for Conservation's Annual Meeting held in Montreal, Bank of America has participated for the fourth consecutive year, demonstrating its ongoing commitment to cultural preservation and facilitating collaboration among global art conservation professionals.
- Artwork Restoration Plans: The Art Gallery of Ontario in Toronto also received funding to restore three works by modernist pioneer Pegi Nicol MacLeod, ensuring these significant pieces can be displayed to the public again, thereby enhancing recognition of her artistic legacy.
- Community Partnership Project: During the conference, the AIC collaborated with McGill University's Redpath Museum to improve storage conditions for the museum's collections, further showcasing Bank of America's vital role in promoting art preservation and community development.
See More
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- Rising Default Rates: According to S&P, private credit defaults are expected to increase from 4.4% to 9-10%, primarily driven by the implications of the AI cycle, which may exacerbate risks associated with corporate loans and undermine investor confidence.
- Software Sector Pressure: The software industry accounts for 19% of private credit collateralized loan obligations, and as growth slows and margins compress, the repayment capacity of these loans is expected to be negatively impacted, adding to market uncertainty.
- Liquidity Crisis: With constrained liquidity, investors are beginning to attempt to withdraw funds, particularly with significant withdrawal requests anticipated in June, which could exert further pressure on the market and lead to more default events.
- Pension Fund Risks: While some large state pension funds continue to maintain investments in private credit, their significant risk exposure could have spillover effects on the broader financial markets, especially given that banks have loaned approximately $300 billion to private credit, potentially putting retail investors at risk.
See More
Bank of America Preferred Stock Dividend History Analysis
- Dividend Overview: Bank of America (BAC.PRN) recently declared a dividend of $0.3125 per share, reflecting the stability of its 5.000% non-cumulative preferred stock, which enhances investor confidence in the stock.
- ETF Impact Analysis: Bank of America comprises 7.94% of the First Trust Nasdaq Bank ETF (FTXO), which is trading lower by about 0.7% on the day, indicating the bank's significance in the financial market despite the ETF's decline.
- Stock Performance Comparison: In Thursday trading, Bank of America's preferred stock (BAC.PRN) rose about 0.5%, while the common shares (BAC) fell about 0.4%, demonstrating the relative stability of preferred shares amid market fluctuations.
- Investor Focus: Market analysts suggest paying attention to S.A.F.E. dividend stocks with preferred shares, indicating that investor preference for stable income may influence future investment decisions.
See More
