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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Bank Of America Corporation (XNYS:BAC) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
BAC
Name:
BANK OF AMERICA CORPORATION (XNYS:BAC)
Sector:
- 45430000.00K
Industry:
Banks�Diversified
CEO:
Mr. Brian Moynihan
Total Employees:
210,000
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -99.23% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF BANK OF AMERICA CORPORATION(BAC) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND BANKS�DIVERSIFIED INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
33.43
One Month Price Target:
$33.69
Six Month Price Target :
$34.98
Likely Price in One Year's Time:
Ticker:
$36.53
Likely Trading Range Today Under (Normal Volatility)
$33.29
Price Upper limit ($) :
$33.59
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$31.62
This week:
$29.39
This month :
$25.34
Other Primary facts
Market Cap:
265.81B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
8.04B
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
17.8%
-15.4%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$41.82
$37.98
$25.04
$28.88
Medium risk (<10%) entry points
Buy Call
Sell Call
$36.73
Buy Put:
Sell Put:
$35.91
$30.12
$30.95
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
BAC
Sharpe Ratio:
0.95%
Comparison:
BAC, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is 47.02% higher than the industry
& is -58.33% lower than the market/S&P 500 average
Average Returns/Yield of
BAC
Daily returns:
0.03%
Weekly returns:
0.17%
Monthly returns:
0.68%
Yearly returns:
6.86%
Comparison of returns:
Average annual returns/yield (last 3 years) is 19.10% above industry average
Classification:
BAC, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.82
Statistical test of Returns:
BAC has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.65%
Weekly Volatility:
5.93%
Monthly Volatility:
11.85%
Yearly Volatility:
41.06%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.82%
Volatility in last five trading days has been -69.15% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.41%
Weekly VaR:
-12.10%
Monthly VaR:
-24.19%
How Much Can the price of
BAC
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-21%
Worst case (decline):
-83.81%
This translates to price declining to:
$26.41
This translates to price declining to:
$5.41
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
BAC is a 70.75% riskier investment compared to the market/S&P 500 & is 46.28% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -5.83% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
BAC
Beta in relation to market/S&P 500--1.38
Expected beta in 1 year's time:
0.774
Expected beta in 3 year's time:
1.095
Unlevered (debt free) Beta:
0.693
Beta in relation to Nasdaq (XNAS):
0.862
Beta in relation to all global stocks::
1.026
Beta Comparison & Analysis
Beta of competitors/peers::
1.053
Beta is 31.09% higher than peers
Average Industry Beta:
1.341
Beta is 2.90% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
9.35%
Sustainable growth rate is -8.95% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.044
Alpha is -19.02% below industry average alpha yield
Alpha is -283% below the market average
Analysis of Cost of Capital of
BAC
Equity cost of capital:
0.126
Equity cost of capital is 2.16% above industry mean WACC
Unlevered (without debt) cost of capital:
6.33%
Before-tax cost of debt:
1.60%
After-tax cost of debt:
1.27%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.27%
WACC is 0.98% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$11.14
Revenue growth rate per share of (3Y):
1.01
Annual revenue growth rate is -27.24% below industry average
EPS:
$3.51
Expected Annual growth rate of EPS (3Y):
8.83%
Expected future EPS growth rate is 1.96% higher than the Banks�Diversified industry
Free cash flow (FCF) per share:
-
Balance sheet equity growth per share: 34.75%
Equity growth rate per share is 59.91% higher than the industry
Debt per share
$34.69
EBITDA per share
$4.91
Valuation Analysis Today of
BAC
P/E Ratio:
10.43
P/E Ratio of Competitors/Peers:
17.89
P/E ratio is -41.71% lower than main peers & is 3.28% higher than the industry
Stock price/value with industry average P/E ratio: $35.45
BAC is -5.69% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $21.33
Present value of the expected future dividends only: $7.81
P/S (Price to Sales ratio):
3
Price to sales ratio is -19.61% below the industry mean
P/B (Price to book value ratio):
1.01
-
-
Net income growth rate (3Y):
31.05%
Net income growth rate is -19.48% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 7.17%
Dividend yeild: 2.51%
Previous Dividend: $0.21
Previous adjusted dividend: $0.21
Previous Dividend: $0.84
Expected next dividend best case: $0.22
Expected next dividend worst case: $0.20
Average dividend payment (long-term): $0.19
Average dividend increase/decrease (growth rate) % per period: 1.67%
Expected next dividend payment date: 22/09/2022
Expected next dividend record date: 09/01/2022
-
Previous dividend payment date: 24/06/2022
Previous dividend record date: 06/03/2022
-
Dividend History:
2022-06-02--$0.21
2021-12-02--$0.21
2021-06-03--$0.18
2022-03-03--$0.21
2021-09-02--$0.21
2021-03-04--$0.18
Dividend growth rate is -185.56% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
104.54%
Net debt to equity ratio:
8.97%
Debt to assets ratio:
8.61%
Net debt to assets ratio:
0.74%
Debt-to-asset ratio is -90.55% below industry average
Ability to repay debt:
Interest coverage ratio:
8.12
Interest coverage ratio is 96.03% more than industry average
Looking forward:
Debt growth rate:
7.66%
Annual debt growth is -166% lower than industry average debt growth rate
Debt repayment rate in last quarter: 2.87%
Analysis of Key Statistics
Correlation of price movement with the market:
0.753
Statistical significance of correlation:
BAC has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.68
Stock price is 10.70% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.68
Correlation of price movement with Nasdaq (^IXIC):
0.032
Covariance of price movement with the market:
0.05
Kurtosis
9.205
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.439
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
BAC
Gross Profit Margin Ratio:
59%
Operating Profit Margin Ratio:
4.37%
Operating profit margin is -87.84% lower than the industry
Net Profit Margin Ratio:
59%
Effective Tax Rate:
5.18%
Effective tax rate is -66.08% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
11.63%
Return on equity (ROE) is -10.61% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
0.96%
Return on assets (ROA) is -15.43% lower than the industry
Financial Leverage:
1.1x
Current Ratio:
1.43
-
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 9.3 years
Stock based compensation to net income ratio:
2.38%
In-depth Efficiency Analysis
Revenue generated per employee:
426.3K
Each employee generates 2% more revenue than industry average revenue per employee
EBITDA generated per employee:
188.0K
Each employee generates -18% less EBITDA than industry average revenue per employee
Profit generated per employee:
147.6K
Each employee generates -2% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 216.3K
Each employee generates 220% more free cash flow than industry average revenue per employee
Assets/Capital per employee
6.5M
Each employee generates 220% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
BAC
MASTERCARD INCORPORATED. (XNYS:MA)
VISA INC. (XNYS:V)
JPMORGAN CHASE & CO. (XNYS:JPM)
MORGAN STANLEY (XNYS:MS)
THE CHARLES SCHWAB CORPORATION (XNYS:SCHW)
ROYAL BANK OF CANADA (XNYS:RY)
THE TORONTO-DOMINION BANK (XNYS:TD)
BLACKROCK, INC. (XNYS:BLK)
AMERICAN EXPRESS COMPANY (XNYS:AXP)
Current Analyst Ratings
Strong buy�25%
Buy�67%
Hold�29%
Sell�0%
Strong sell�4%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
89.52B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
9.48B
13.75B
-
38.96B
44.76B
5.80B
- 1737000.00K
9.83B
49.17B
4.86B
1.93B
39.48B
3.91B
31.00B
32.69B
1.69B
31.00B
Statement of Cash Flow
Date:
Period:
494.00M
Differed Income Tax :
47.00M
Stock Based Compensation :
739.00M
Change in Working Capital :
- 1928989000.00K
Accounts Receivables:
-
Other Working Capital:
10.63B
Other Non-Cash Items:
1875.21B
Net Cash Provided by Operating Activities:
- 45430000.00K
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
- 55260000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
279.58B
289.29B
568.87B
97.58B
-
- 631032000.00K
35.41B
10.82B
69.02B
-
1283.28B
-
-
1363.12B
4565.93B
3238.22B
-
24.79B
-
-
-
24.79B
278.71B
-
278.71B
3225.53B
2971.61B
59.97B
192.93B
- 13417000.0K
-
March 31, 2022 at 6:00:00 AM
19.31B
266.62B
3238.22B
1572.57B
303.50B
23.9B
2.04B
- 15190000.00K
- 68408000.00K
- 8241000.00K
-
- 2650000.00K
- 2222000.00K
54.00B
40.89B
- 1335000.00K
- 74287000.00K
273.93B
348.22B
- 45430000.00K
-
- 45430000.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
BAC
2023
2024
2025
2026
2027
$36.71
$54.50
$59.56
$65.08
$71.12