As we get deeper into earnings season, investors continue to look for signs of declining earnings due to a strong US dollar, weakening oil, and overall mixed economic data. One sector in particular that investors will be watching are the financials. Investors got an early preview of other bank earnings this morning after JPMorgan Chase and Wells Fargo both reported earnings. Both banks beat analysts’ estimates on earnings per share and revenue, giving investors insight into the Bank of America earnings when they report first quarter earnings before market opens on Wednesday.
Bank of America analyst earnings estimates
Analysts will be looking for Bank of America earnings results to come in at earnings per share of $0.29 on revenue of $21.51 billion. Analysts have applauded Bank of America’s efforts to cut legal costs, which have largely plagued earnings in the past. However, there is concern with trading losses, as the bank reported losses in its trading activities last quarter. That being said, Bank of America’s management still has positive expectations for full year 2015 and 2016 earnings, which they estimate will come in at $1.43 per share in 2015 and $1.80 per share in 2016. This is a higher forecast than analysts have for the same full year estimates of $1.39 per share in 2015 and $1.64 per share in 2016.
Credit Suisse estimates 7% revenue growth year over year
Credit Suisse analyst Susan Katzke, maintains the $0.29 earnings per share target for the first quarter earnings release and forecasts revenue to show 7% growth year over year. Katzke highlights a strong mortgage unit at Bank of America, lower legal fees, etc. Additionally, Katzke noted that Bank of America is expected to report “clean results with no material surprises in terms of litigation or repositioning charges”. This should certainly be a welcoming aspect for Bank of America investors, who have largely had to deal with legal surprises over the years. Credit Suisse maintains a $21 price target on Bank of America.
Overall, investors are mostly uneasy as the first quarter 2015 earnings season is underway. Caution and poor results from the fourth quarter 2014 has certainly left a poor taste in investors’ mouths, but Bank of America certainly stands to beat earnings if what analysts are saying about the company is true. Bank earnings have been decent thus far and investors will be watching Bank of America tomorrow morning before the bell.