Bank of America Renews $25B Share Buyback Plan
Bank of America (BAC) has revealed that it plans to renew its $25 billion share buyback plan, which was announced in April 2021. In the six months period, the banking giant said to have repurchased stocks worth about $14 billion.
The current renewed authorization replaces the prior program. The repurchases may be made through open market transactions or privately negotiated deals. (See Bank of America stock charts on TipRanks)
The timing and amount of repurchases will depend on the company’s capital position, liquidity and financial performance, among others. Also, the program comes with no expiration date.
Alongside the share repurchase plan, Bank of America has declared a quarterly common stock cash dividend of $0.21 per share, which is payable on December 31, 2021, to shareholders of record as of December 3, 2021.
Last week, the bank reported strong third-quarter results on the back of robust revenue growth and lower credit losses. While earnings increased 66.7% year-over-year, total revenue rose 12.3%.
Following the earnings release, Evercore ISI analyst Glenn Schorr assigned a Buy rating to the stock and a price target of $48. The price target implies 1.9% upside potential from current levels.
Schorr said, “Thesis-wise, this combo of an improving economy & this solid execution has to leave shareholders less nervous than a high stakes game of Red Light, Green Light. While valuation looks a tad stretched, normalized earnings look a little more comfortable, and we’re inclined to think the stock continues to grind higher.”
The rest of the Street is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 8 Buys, 4 Holds, and 1 Sell. The average Bank of America price target of $47.42 implies 0.7% upside potential from current levels.
BAC scores a 9 out of 10 on TipRanks’ Smart Score rating system, suggesting that the stock is likely to outperform market averages.
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