Goldman Sachs Comment on Bank of America (BAC) Q1; Results Have Something for Bulls and Bears

Bank of America (NYSE: BAC) stock declined Wednesday after reporting Q1 results. In the view of analyst Richard Ramsden of Goldman Sachs, results include something for the bulls and the bears.

"BAC reported 1Q EPS of -$0.05 vs. GS/consensus at $0.06/$0.05, with much of the delta driven by higher-than-expected legal charges ($6bn or $0.40 per share vs. announced FHFA settlement of $3.7bn or $0.21). Ex legal and other 1x items, we peg core EPS at $0.30 (vs. our comparable number of $0.30), as strong pre-provision earnings (IBD-driven) offset higher provision (less reserve release)," said Ramsden.

"Bulls on the stock will likely point to strong fee income (best FICC trading so far), rapidly declining LAS expenses, stable core NIM, and fully compliant capital/liquidity ratios. Bears could point to continued mortgage litigation overhang, limited new BAC saves showing (core revenue down 4% YoY, core expense ex LAS only down 1%), and slowing reserve release tailwind. Net-net, shares could see nearterm pressure as questions remain over the path to 2015/2016E consensus of $1.60/$1.85 (particularly with shares outperforming the BKX 5% YTD)," he added.

Goldman Sachs has a Neutral rating on Bank of America with a price target of $18.00

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 $16.39 yesterday.

You May Also Be Interested In

• Goldman Sachs on Meta Platforms Inc. (META): 'We expect investors to have an initial negative reaction'
• Evercore ISI Comments on IBM (IBM) Earnings
• Ternium SA (TX) Tops Q1 EPS by 17c