Analysis upon where will Bank of America stock be in coming next five years.
Since the global financial crisis in 2008 Bank of America has indeed moved an extensive way related to market capitalization asset quality, and enhanced focus on its main business. In spite all this company’s stock still trading under book value. Now the question arises where its stock will be in coming five years.
According to analyst Matt Frank, the American bank will not only grew but has the ability to outperform in the next five years. While, it is based on high risk and high return phenomenon, so shareholders should keep that in mind while approaching the stock.
Since the crisis, the bank did a tremendous job by enhancing its assets quality, generating capital, and making thing easier for itself. In order to reduce its costs, expenses and work efficiently the bank is dynamically decreasing its physical existence and because of that it’s improving at cross selling items to its current customers. In the last quarter, it issued almost 1.2 million fresh credit cards with almost 70% to its current enrolled customers.
In the end it may indeed be true to say that there is a lot to come in coming five years period , which will be ahead of banks control and can affect the share price, together with one more recession. However, analyst believe that the expected scenario is United States sustained recovery and increasing profits for the bank.
According to another analyst, Dan Caplinger said that the American bank has all the potentials to mount higher compared to its current position but it seems impossible that it can surpass its rival.
On e important thing is when compared to some other big banks, Bank of America’s price to book ratio is too small, that makes the shareholders question about the performance.
However the major problem faced by the bank is alteration in capital Requirements of federal Reserves. Moreover, the American bank has previously bounced back significantly from its all time low at the timed of financial crisis. Even though Brian Moynihan Chief Executive Officer acts upon his promises of restoring banks reputation, new shareholders in the bank might not be able to gather full advantage out of this gain.
By keeping in mind all these hesitations, The Bank of America will not be investor’s preferable choice in the sector. stock prices of the bank is most likely to rise by the year 2020, but not as much as its rival banks.