Bank of America shares give bulls hope
The stock closed above $16 Tuesday for the first time in weeks, stoking optimism that it might keep rising.
By Lauren Tara LaCapra, TheStreet
Bank of America (BAC) finished Tuesday above $16, offering hope for breakout bulls.
Financials were largely left out of the end-of-year rally. Though Bank of America shares topped $16 during three December trading sessions, they fell during two. The stock finished at $16.28 on Dec. 4 on news of its plan to repay $45 billion in TARP funds on Dec. 2, and then the strong pricing of its subsequent equity offering on Dec. 3.
The shares didn’t hold those gains as the year closed. The stock even briefly dropped to less than $15, the price of its offering, on Dec. 17. But the shares’ performance in recent months suggests they might get a boost during the coming weeks.
On Tuesday, Bank of America shares added 51 cents, or 3.3%, to close at $16.20. The stock has gained 7.6% this week, ahead of its fourth-quarter report on Jan. 20, which might show that credit costs have peaked, as Chief Executive Brian Moynihan assured colleagues at an event earlier this week.
"The worst is behind us in the sense of credit," Moynihan said on Monday.
It wouldn’t be the first time Bank of America shares advanced ahead of a quarterly report. Bank of America issued its third-quarter results on Oct. 16. The day before the release, its stock hit $19.10 in intraday trading, a level not seen since November 2008.
On Oct. 1, two weeks before the company released third-quarter results, the stock closed at $16.21, its lowest price since it closed at $15.93 on Aug. 12. The stock rose during seven of the 10 trading sessions from Oct. 1 to Oct. 15.
Analysts polled by Thomson Reuters expect Bank of America to report a loss of 50 cents a share for the December quarter, but Wall Street is decidedly bullish on the stock, with 19 of the 25 analysts covering the company rating it “buy” (10) or “strong buy” (9).
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