Connect with us

Hi, what are you looking for?


Pro says buy Bank of America stock after Fed signalled 4.6% terminal rate

Shares of the Bank of America Corp (NYSE: BAC) ended a bit above their year-to-date low but Gina Sanchez (Lido Advisors) remains convinced the stock will eventually benefit from higher rates.

Bank of America stock is a great pick for higher rates

She recommends buying Bank of America shares after the U.S. Federal Reserve, earlier this week, signalled a terminal rate of 4.60% in 2023. Defending her constructive view on CNBC’s “The Exchange”, Sanchez said:

As the short end is rising, some banks are getting squeezed in net interest margin. But a big chunk of Bank of America is actually in very low paying deposits in their wealth management unit. So, they’re not suffering that net interest margin squeeze.

Shares are currently trading at the same price as in 2018 even though the Bank of America is now earning over 20% more and has about 20% less shares outstanding.

Bank of America stock has a dividend yield of 2.77%.

Wall Street has a consensus ‘overweight’ rating on BAC

In July, the Charlotte-headquartered investment bank reported Q3 profit that slightly missed the Street expectations. Its net interest income, however, was up 22% on a year-over-year basis.

Bank stocks tend not to be a good pick for a recession that’s likely coming. But Sanchez looks confident that the Bank of America can offset that negative catalyst with continued rates-driven strength in its net interest income.

There net interest margins expanded 18% in the first six months and they’re probably going to be able to hold on to those gains.

Earlier this week, CFO Alastair Borthwick also said the underlying core portfolio and the core performance of both consumer and commercial was in terrific shape.

Wall Street rates the Bank of America stock at “overweight” as well.

The post Pro says buy Bank of America stock after Fed signalled 4.6% terminal rate appeared first on Invezz.

Enter Your Information Below To Receive Free Trading Ideas, Latest News And Articles.

    Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

    You May Also Like


    Solana (SOL/USD) is enormously underrated as a cryptocurrency project, even with its hiccups – including the latest exploit on one of the ecosystem apps....

    Editor's Pick

    The new eSIM infrastructure will help modernise the IoT connectivity market with fast, secure connections and reduced vendor lock-in. 1oT, a tech startup from...


    The latest Job Openings and Labor Turnover Survey from the Bureau of Labor Statistics shows the total number of job openings in the economy...


    U.S. District Court Judge Reed O’Connor recently ruled to uphold the rights of employers granted in the Religious Freedom Restoration Act, rather than uphold...

    Disclaimer:, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2023