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Robust Trading Performance to Aid BofA's (BAC) Q1 Earnings
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Bank of America’s (BAC - Free Report) trading revenues (constituting a significant portion of its top line) are expected to have been a surprising bright spot in the first quarter of 2022. After witnessing the gradual normalization of trading activities over the past few quarters, trading revenues are expected to have improved this time. Thus, the company’s trading revenues are likely to offer much-needed support to its upcoming results, slated to be announced on Apr 18, before the opening bell.
The year began with the expectations of trading volumes declining to levels seen during the pre-pandemic period after a strong performance during the past two years. Nevertheless, the ongoing Russia-Ukraine conflict and prospects of multiple and bigger rate hikes by the Federal Reserve to control red-hot inflation led to an increase in client activity and trading volume in the March quarter.
These developments led to a heightened level of volatility in both equity markets and bond trading. Therefore, BAC is likely to have recorded a solid improvement in trading revenues in the first quarter.
The Zacks Consensus Estimate for equity trading revenues of $1.63 billion suggests an increase of 20.2% from the prior quarter’s reported number. The consensus estimate for fixed-income trading revenues of $2.53 billion indicates a jump of 60.5%. The consensus estimate for total trading revenues is pegged at $4.15 billion, implying a surge of 41.5%.
Overall Earnings & Revenue Growth Expectations
The Zacks Consensus Estimate for first-quarter earnings is pegged at 77 cents, which has witnessed a downward revision of 1.3% over the past 30 days. Further, the estimated figure suggests a fall of 10.5% from the year-ago reported number.
The consensus estimate for sales of $23.22 billion indicates a 1.7% rise.
Click here to know about the other factors that are likely to have impacted BAC’s overall performance.
Our Take
Aside from robust trading business, decent loan demand is expected to have supported the Zacks Rank #3 (Hold) stock’s first-quarter performance. However, dismal investment banking performance and higher expenses are expected to have been headwinds.
Trading revenues constitute a major portion of total revenues for other major banks, including Citigroup (C - Free Report) and Morgan Stanley (MS - Free Report) . Earnings of C and MS are likely to get support from strong trading performance during the March quarter.
Both Citigroup and Morgan Stanley are slated to announce first-quarter results on Apr 14.
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Robust Trading Performance to Aid BofA's (BAC) Q1 Earnings
Bank of America’s (BAC - Free Report) trading revenues (constituting a significant portion of its top line) are expected to have been a surprising bright spot in the first quarter of 2022. After witnessing the gradual normalization of trading activities over the past few quarters, trading revenues are expected to have improved this time. Thus, the company’s trading revenues are likely to offer much-needed support to its upcoming results, slated to be announced on Apr 18, before the opening bell.
The year began with the expectations of trading volumes declining to levels seen during the pre-pandemic period after a strong performance during the past two years. Nevertheless, the ongoing Russia-Ukraine conflict and prospects of multiple and bigger rate hikes by the Federal Reserve to control red-hot inflation led to an increase in client activity and trading volume in the March quarter.
These developments led to a heightened level of volatility in both equity markets and bond trading. Therefore, BAC is likely to have recorded a solid improvement in trading revenues in the first quarter.
The Zacks Consensus Estimate for equity trading revenues of $1.63 billion suggests an increase of 20.2% from the prior quarter’s reported number. The consensus estimate for fixed-income trading revenues of $2.53 billion indicates a jump of 60.5%. The consensus estimate for total trading revenues is pegged at $4.15 billion, implying a surge of 41.5%.
Overall Earnings & Revenue Growth Expectations
The Zacks Consensus Estimate for first-quarter earnings is pegged at 77 cents, which has witnessed a downward revision of 1.3% over the past 30 days. Further, the estimated figure suggests a fall of 10.5% from the year-ago reported number.
The consensus estimate for sales of $23.22 billion indicates a 1.7% rise.
Click here to know about the other factors that are likely to have impacted BAC’s overall performance.
Our Take
Aside from robust trading business, decent loan demand is expected to have supported the Zacks Rank #3 (Hold) stock’s first-quarter performance. However, dismal investment banking performance and higher expenses are expected to have been headwinds.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Competitive Landscape
Trading revenues constitute a major portion of total revenues for other major banks, including Citigroup (C - Free Report) and Morgan Stanley (MS - Free Report) . Earnings of C and MS are likely to get support from strong trading performance during the March quarter.
Both Citigroup and Morgan Stanley are slated to announce first-quarter results on Apr 14.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.