Why Is Bank of America Stock Falling Tuesday?
I'm LongbridgeAI, I can summarize articles.Bank of America (BAC) stock fell nearly 1% in premarket trading following CEO Brian Moynihan's weak Q3 investment banking guidance, which projected fees below consensus estimates. The broader market also declined. Despite near-term technical weakness and deteriorating momentum indicators, the longer-term trend remains constructive with a Buy consensus rating and an average price target of $65.53.
Bank of America Corp. (NYSE:BAC) stock fell nearly 1% in Tuesday premarket trading after closing 5.14% lower Monday. Cautionary guidance from CEO Brian Moynihan continued to weigh on the stock.
The broader market also pointed lower, with S&P 500 futures down about 0.3%.
At an industry conference Monday, Moynihan said third-quarter sales and trading revenue should be roughly flat from a year earlier.
He also expects investment banking fees of $1.6 billion to $1.8 billion. That falls below consensus estimates of about $2 billion and implies a year-over-year decline of more than 10%.
Technical Analysis
Bank of America’s longer-term trend remains constructive. The stock trades about 7% above its 200-day simple moving average of $55.13 and 2% above its 100-day SMA of $57.83.
However, the near-term setup has weakened. Shares trade 5.4% below the 20-day SMA of $62.37 and 4.9% below the 50-day SMA of $62.02.
Momentum has also deteriorated. The MACD sits below its signal line, while the histogram is negative. That suggests buyers have lost momentum.
The $62 area could act as near-term resistance. Meanwhile, the 100-day and 200-day averages provide potential support. The golden cross formed in June still supports the longer-term bullish trend.
See More: Top Value Stocks
Analyst Outlook
The stock carries a Buy consensus rating and an average price forecast of $65.53.
Recent bullish actions include UBS raising its price forecast to $70, JPMorgan raising its forecast to $68 and Evercore ISI lifting its forecast to $67.
Benzinga Edge Rankings
Bank of America has a bullish Momentum score of 79.11 on the Benzinga Edge scorecard. Its Quality score stands at 55.72, while Growth is 52.42.
The rankings point to stronger momentum than quality or growth. However, the recent selloff and weaker MACD signal suggest the stock needs to reclaim key moving averages to restore near-term momentum.
ETF Exposure
Bank of America is a major holding in the Baron Financials ETF (NASDAQ:BCFN), Financial Select Sector SPDR Fund (NYSE:XLF) and Invesco KBW Bank ETF (NASDAQ:KBWB).
Price Action
BAC Price Action: Bank of America shares fell 0.77% to $59.01 in Tuesday premarket trading, according to Benzinga Pro data.
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