BAC Stock Pivots Lower Ahead of Earnings

Bank of America tends to do well the day after earnings

Assistant Editor
Apr 13, 2020 at 1:29 PM
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With a first-quarter earnings report due out before the open on Wednesday, April 15, the shares of Bank of America Corp (NYSE:BAC) are falling back, down 4.1% at $23.83 today after running out of steam at their 40-day moving average, which is also home to BAC's pre-bear gap lows near the $25 region. Below, we'll take a broader look at sentiment surrounding the financial stock ahead of its quarterly report, and how BAC has fared after earnings in the past. 

BAC EP Chart

Analysts are split on Bank of America. Currently, nine out of 17 covering the stock sport a "buy" or better rating, while seven call it a "hold," and one says "strong buy." Meanwhile, the 12-month consensus target price of $27 is a 12.3% premium to current levels. 

Options traders have taken a slightly more bearish stance. This is per BAC's 10-day put/call volume ratio of 0.74 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) which sits higher than 85% of all other readings from the past 12 months, suggesting a bigger appetite for long puts of late. 

Looking back, the stock has seen mostly positive post-earnings returns during the past two years. In fact, six out of eight of these next-day sessions were positive, with BAC averaging a 2.2% swing, regardless of direction. This time around, the options pits are pricing in a much bigger 10.5% move for BAC the session following its quarterly report. 

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