Bank of America’s (NYSE:BAC) Q2 results topped expectations after it reported adjusted Q2 earnings of $0.83 per share, a decline of 5.7% year-over-year, beating analysts’ consensus estimate of $0.80 per share. The drop in earnings was a result of a fall in net interest income amid a macro environment of high interest rates. BAC’s net interest income fell 3% year-over-year to $13.86 billion in the second quarter.
The bank posted revenues, net of interest expense, of $25.4 billion, up by 1% year-over-year and above Street estimates of $25.22 billion.
BAC’s Revenue Breakdown
BAC’s investment banking fees surged 29% year-over-year to $1.56 billion in the second quarter, exceeding estimates of $1.51 billion. The bank’s asset management fees rose 14% to $3.37 billion due to higher stock market values, resulting in the wealth management business’s revenue increasing by 6.3% to $5.57 billion.
Regarding net interest income (NII), it is expected to rebound in the fourth quarter to around $14.5 billion. NII represents the difference between earnings on loans and payments to depositors.
Dividend and Stock Buybacks
The bank announced an 8% rise in its quarterly dividend to $0.26 per share and conducted stock buybacks totaling $3.5 billion during the second quarter.
Is BAC a Good Buy Right Now?
Analysts remain cautiously optimistic about BAC stock, with a Moderate Buy consensus rating based on 11 Buys and five Holds. Over the past year, BAC has increased by more than 40%, and the average BAC price target of $41.97 implies an upside potential of 0.2% from current levels. These analyst ratings are likely to change following BAC’s Q2 results today.
