We are now entering into the season that many investors wait for every quarter; earnings season. Earnings are a key catalyst for just about any stock. When earnings are positive, we tend to see exponential growth. Adversely, when earnings are negative, we see drastic declines. Nonetheless, no matter what happens with earnings, investors can expect to see incredible price movement. With that said, we can expect to see big movement out of Bank of America stock this week as the company is expected to release its earnings for the quarter. Today, we'll talk about what analysts are expecting to see, what we've seen from the stock over the past week, and what we can expect to see from Bank of America once earnings are released. So, let's get right to it…
What Analysts Are Expecting To See From Bank Of America Earnings
All in all, analysts have overwhelmingly positive opinions with regard to what to expect from Bank of America this earnings season. According to The Street, Bank of America is expected to “post the highest year-over-year earnings-per-share growth” of all of the “too big to fail banks”. This includes banks like JPMorgan Chase, Wells Fargo and Citigroup. When it comes to earnings per share, Bank of America is projected to produce $0.36; an 89% climb over the results of the same quarter last year when earnings came in at only $0.19 per share. On the other hand, The Street is expecting to see a decline in overall revenue of about 3%; coming in at $21.30 billion. Nonetheless, if earnings growth is as expected, investors won't be paying much attention to overall revenue.
What We've Seen From Bank Of America Over The Past Week
The past week has been incredibly rough on stocks around the world. As the Greek Debt Crisis continued to spiral out of control and turmoil in the Chinese markets set in, a sell-off ensued; leading to big declines everywhere we looked. Unfortunately for Bank of America, the stock wasn't immune to the market wide devastation. Monday, Tuesday, and Wednesday, the story was all about declines as the stock plummeted with the rest of the market. However, the blow was cushioned on Thursday and Friday when the stock started to see gains. Believe it or not, the losses experienced in the beginning of last week are likely to set the stage for explosive growth upon the release of earnings.
The reality is that thanks to global market turmoil, Bank of America is lower than I believe it should be. And while it's likely to edge up Monday and Tuesday, the stock will still likely be trading lower than it should upon the release of earnings. Therefore, if the earnings are positive, we are going to see incredible growth from the stock. Which leads us to…
What We Can Expect From Earnings & How To Profit From The Trends
Based on my research, I have to say that I think the analysts have hit the nail on the head with this one. There's no doubt in my mind that the earnings produced by Bank of America are likely to be overwhelmingly positive. Considering that positive earnings generally lead to gains in the market, I'm expecting for Wednesday to be a big day for Bank of America investors. With that said, if you're planning on trading next week, don't miss this opportunity. Once earnings are released, I think we're going to see explosive movement from Bank of America in the positive direction. Therefore, traders will have the ability to take advantage of incredibly profitable call options. So, mark keep your eyes peeled as this is a big opportunity in the making.
What Do You think?
What are you expecting from Bank of America's earnings report and why? Let us know in the comments below! Keep informed and check out the latest financial news.