How to Play BAC Stock Ahead of U.S. Presidential Poll and Rate Cuts?

Zacks11-04

Amid the closely fought U.S. presidential election and another imminent interest rate cut by the Federal Reserve, investors are trying to gauge how the stock markets will react. Against this backdrop,...

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Against this backdrop,...</p>\n\n<a href=\"https://finance.yahoo.com/news/play-bac-stock-ahead-u-130300721.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU0306806265.USD","symbol_name":"SCHRODER ISF GLOBAL DIVIDEND MAXIMISER \"A\" ACC","start_time":0,"source_url":"https://finance.yahoo.com/news/play-bac-stock-ahead-u-130300721.html","article_id":"2480589034","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/74suA7mIFAOU1hFr1H9axg--~B/aD00MDA7dz02MzU7YXBwaWQ9eXRhY2h5b24-/https://media.zenfs.com/en/zacks.com/0a02e5c67600817c44948f31007b0af3"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2480589034","pubTimestamp":1730725380,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"Amid the closely fought U.S. presidential election and another imminent interest rate cut by the Federal Reserve, investors are trying to gauge how the stock markets will react. Against this backdrop, Bank of America BAC stock is gaining investors’ interest.History has shown that equity markets tend to perform well during election years. Presidential polls will result in heightened near-term market volatility, which will likely support BAC’s trading revenues. The company has been recording a steady rise in sales and trading revenues since 2022.This year is turning out to be a banner for the trading business. In the first three quarters of 2024, Bank of America’s sales and trading revenues  grew 7% year over year to $14.8 billion. This was driven by solid equity trading performance. The momentum is expected to continue in the ongoing quarter.","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU0306806265.USD":"SCHRODER ISF GLOBAL DIVIDEND MAXIMISER \"A\" ACC","IE00BDRTCR15.USD":"PINEBRIDGE GLOBAL DYNAMIC ASSET ALLOCATION \"ADC\" (USD) INC A","BK4099":"汽车制造商","LU0106831901.USD":"贝莱德世界金融基金A2","LU2361044949.HKD":"WELLINGTON US QUALITY GROWTH \"A\" (HKD) ACC","IE00BZ1G4Q59.USD":"LEGG MASON CLEARBRIDGE US EQUITY SUSTAINABILITY LEADER \"A\"(USD) INC (A)","LU0175139822.USD":"AB FCP I Global Equity Blend A USD","LU0496365809.HKD":"TEMPLETON GLOBAL INCOME \"A\" (HKD) INC (Q)","LU0130102774.USD":"Natixis Harris Associates US Equity RA USD","TTM":"塔塔汽车","BK4516":"特朗普概念","LU0215105999.USD":"SCHRODER ISF GLOBAL EQUITY \"A\" ACC","LU0648001328.SGD":"Natixis Harris Associates US Equity RA SGD","LU0477156797.USD":"HARRIS ASSOCIATES GLOBAL EQUITY \"RE\" (USD) ACC","LU0976567544.SGD":"FTIF - Templeton Global Income A Mdis SGD-H1","LU1064131342.USD":"Fullerton Lux Funds - Global Absolute Alpha A Acc USD","LU1718418525.SGD":"JPMorgan Investment Funds - Global Select Equity A (acc) SGD","IE0034235188.USD":"PINEBRIDGE GLOBAL FOCUS EQUITY \"A\" (USD) ACC","MSC":"新濠影汇","LU1201861165.SGD":"Natixis Harris Associates Global Equity PA SGD","LU0256863811.USD":"ALLIANZ US EQUITY \"A\" INC","LU0882574139.USD":"富达环球消费行业基金A ACC","BK4566":"资本集团","LU0162691827.USD":"BGF US BASIC VALUE \"A4\" INC","LU":"陆金所","BK4575":"芯片概念","LU0211331839.USD":"FRANKLIN MUTUAL GLB DISCOVERY \"A\" (USD) ACC","BK4150":"赌场与赌博","IE00BLSP4452.SGD":"Legg Mason ClearBridge - Tactical Dividend Income A Mdis SGD-H Plus","LU0980610538.SGD":"Natixis Harris Associates US Equity RA SGD-H","LU0306807586.USD":"SCHRODER ISF GLOBAL DIVIDEND MAXIMISER \"A\" (USD) INC QF","BK4559":"巴菲特持仓","IE00B3S45H60.SGD":"Neuberger Berman US Multicap Opportunities A Acc SGD-H","LU0170899867.USD":"EASTSPRING INVESTMENTS WORLD VALUE EQUITY  \"A\" (USD) ACC","BAC":"美国银行","LU2129689431.USD":"FRANKLIN GLOBAL INCOME \"A\" (USD) ACC","LU1084165304.USD":"FIDELITY WORLD \"A\" (USD) ACC","LU1280957306.USD":"THREADNEEDLE (LUX) US CONTRARIAN CORE EQUITIES \"AUP\" (USD) INC","LU0321505868.SGD":"Schroder ISF Global Dividend Maximiser A Dis SGD","LU0321505439.SGD":"Schroder ISF Global Dividend Maximiser A Acc SGD","LU0072461881.USD":"BGF US BASIC VALUE \"A2\" ACC"},"translate_title":"如何在美国总统民意调查和降息之前玩BAC股票？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"BAC":1,"TTM":1,"US10Y.BOND":0.9,"MSC":0.9,"US12M.BOND":0.9,"US2Y.BOND":0.9,"US30Y.BOND":0.9,"US3Y.BOND":0.9,"US5Y.BOND":0.9,"US6M.BOND":0.9,"US7Y.BOND":0.9,"US912797HE00.BOND":0.6,"LU":0.6},"content_text":"Amid the closely fought U.S. presidential election and another imminent interest rate cut by the Federal Reserve, investors are trying to gauge how the stock markets will react. Against this backdrop, Bank of America BAC stock is gaining investors’ interest.History has shown that equity markets tend to perform well during election years. Presidential polls will result in heightened near-term market volatility, which will likely support BAC’s trading revenues. The company has been recording a steady rise in sales and trading revenues since 2022.This year is turning out to be a banner for the trading business. In the first three quarters of 2024, Bank of America’s sales and trading revenues (excluding DVA) grew 7% year over year to $14.8 billion. This was driven by solid equity trading performance. The momentum is expected to continue in the ongoing quarter.\nTotal Sales and Trading Revenue (excl. net DVA) \nImage Source: $Bank of America Corp(BAC-N)$.\nBank of America & Interest Rate Cuts\nThe interest rate cut by the U.S. central bank is a foregone conclusion at the end of the Nov. 6-7 FOMC meeting. The move will benefit Bank of America, which has been reeling because of four-decade-high interest rates. During the pandemic, BAC piled up billions of dollars worth of long-dated Treasuries and mortgage bonds at low rates. With the Fed aggressively raising interest rates since early 2022, the company has been sitting on huge paper losses, which is hurting its net interest income (NII) expansion.Though its NII reached a trough in the second quarter of 2024 and increased in the third quarter, the growth is expected to be uneven going forward. Management expects the metric to rise in the fourth quarter on the assumptions of two more rate cuts in the quarter and a modest increase in both loans and deposits.\nNet Interest Income \nImage Source: Bank of America Corp.\nBAC projects NII to keep growing into the next year with some quarterly volatility as the Fed lowers the rates. Meanwhile, its close peer, JPMorgan JPM, is expected to record a decrease in 2025 NII due to interest rate cuts.\nBAC’s Branch Expansion & Digital Initiatives\nBank of America’s aggressive branch expansion across the United States as part of a broader strategy to solidify customer relationships and tap into new markets will drive NII growth over time. The company announced plans to open more than 165 new financial centers by 2026-end, with nearly 40 set to open this year.This new wave of expansion follows the branch network growth plans announced by Bank of America in June 2023. The plan focused on entering nine new markets, including Omaha, Boise and Milwaukee.The bank's strategic investment in new financial centers and push into new markets reflect a broader industry shift toward optimizing branch networks to deepen customer relationships and tap into new business opportunities. In this competitive environment, the ability to blend digital convenience with in-person expertise is expected to give Bank of America long-term leverage in the evolving banking landscape.BAC’s consumer mobile banking app now serves more than 47 million active users, and roughly 23 million consumers use Zelle, which has become a dominant way to move money. \nDigital Adoption\nImage Source: Bank of America Corp.\nAlmost 87% of BAC’s global banking clients are digitally active, and the company’s CashPro platform uses AI to streamline service requests. BAC plans to continue strengthening its technology initiatives and spend heavily on these. These efforts help it attract and retain customers and boost cross-selling opportunities.\nBAC’s Fortress Balance Sheet & Solid Liquidity\nBank of America’s liquidity profile remains solid. As of Sept. 30, 2024, average global liquidity sources were $947 billion. Also, the company’s investment-grade long-term credit ratings of A1, A- and AA- from Moody’s, S&P Global Ratings and Fitch Ratings, respectively, and a stable outlook allow easy access to the debt market.BAC continues to reward shareholders handsomely. After it cleared the 2024 stress test, the company increased its quarterly dividend by 8% to 26 cents per share. In the last five years, it has hiked dividends four times, with an annualized growth rate of 8.4%. Currently, the company's payout ratio is 33% of earnings.\nDividend Yield \nImage Source: Zacks Investment Research\nIn July, the company authorized a $25 billion stock repurchase program, effective Aug. 1, to replace the previous program. As of Sept. 30, 2024, almost $22.4 worth of buyback authorization remained available.\nIs BAC Stock Worth Holding on to Now?\nAfter a solid start to 2024, where BAC stock was among the top five banks on the S&P 500 Index, it seems to have lost momentum. So far this year, BAC shares are up 24%. Meanwhile, the industry has risen 28.3%, respectively. Also, BAC stock is trading below its peers — JPMorgan and Wells Fargo WFC. \nYTD Price Performance  \nImage Source: Zacks Investment Research\nBank of America stock is currently trading at a 12-month trailing price-to-tangible book (P/TB) of 1.63X. This is below the industry’s 2.61X. This shows the stock is inexpensive currently.\nPrice-to-Tangible Book Ratio (TTM) \nImage Source: Zacks Investment Research\nBAC stock is cheap compared with JPM, which has a P/TB of 2.46X. Likewise, it is trading at a slight discount to WFC’s P/TB of 1.66X.Analysts seem to be cautious about Bank of America’s prospects. Over the past 30 days, the Zacks Consensus Estimate for 2024 and 2025 earnings has moved lower. \nEstimate Revision Trend \nImage Source: Zacks Investment Research\nThis downward trend in earnings estimates reflects a bearish sentiment among analysts.Bank of America's global presence, diversified revenues, branch openings and technological innovations to attract and retain customers provide a solid base for organic growth. Also, clarity on the Fed’s rate cut path and inexpensive valuation make the stock worth considering. However, challenges like high funding costs and higher regulatory capital requirements as part of the Basel 3 end-game cannot be ignored. Also, pessimistic analyst sentiments are a concern.Investors should consider these factors carefully and evaluate their risk tolerance before buying BAC. Nonetheless, those who already own this Zacks Rank #3 (Hold) stock can hold on to it because it is unlikely to disappoint over the long term. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.\nWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report\nBank of America Corporation (BAC) : Free Stock Analysis Report\nWells Fargo & Company (WFC) : Free Stock Analysis Report\nJPMorgan Chase & Co. (JPM) : Free Stock Analysis Report\nTo read this article on Zacks.com click here.\nZacks Investment Research","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2480589034"}