Bank of America will double to $60, says veteran banks analyst

Second quarter (Q2) earnings season for the US banking sector is in full swing, with a mixed set of results so far. Here is a round-up of the banks’ Q2 scorecards to date.

JPMorgan

JPMorgan shares closed higher on Friday after reporting a beat on the top and bottom line. Revenue increased 6.5% to $28.39 billion. The bank saw Q2 profit jump 18% to hit a record $8.32 billion.

Revenues in its trading division was a bright spot, rising 13% to hit $5.4 billion and soaring past expectations. CEO, Jamie Dimon, said ‘we see good global economic growth, particularly in the US, where consumer and business sentiment is high’. Dick Bove, veteran banks analyst and chief strategist at Hilton Capital Management, told IGTV that the numbers were superb.

Citigroup

Citigroup’s Q2 revenue came in at $18.47 billion, below expectations at $18.51 billion. Net income per share hit $1.63, ahead of Thomson Reuters I/B/E/S expectations for $1.56 and up from $1.28 in the same period last year.

Shares closed Friday’s session lower on the back of disappointing numbers, and the stock has sharply underperformed the wider sector year-to-date. Bove described the Citigroup results as mediocre. He said the company is ‘making a lot of mistakes’ and the stock ‘should be avoided’. He argued that Citigroup could be the most impacted by trade tensions between the US and China because ‘at one point Citigroup claimed itself to be the biggest trade finance company in the world’.

Bank of America

Shares in Bank of America (BoA) jumped after it reported revenues of $22.6 billion, topping estimates. Fixed income, currencies and commodities (FICC) trading revenue hit $2.29 billion, also ahead of forecasts.

Adjusted earnings per share (EPS) hit 64 cents, beating Bloomberg’s forecast for 57 cents. Bove said BoA is his favourite stock in the sector, and has the potential to rise to $60 a share. He also added that chief executive Brian Moynihan ‘has proven to be an expert CEO’.