Bank of America stock (NYSE: BAC) currently trades at $27 per share, around 45% below (83% upside) its level of $49 on February 8, 2022 (pre-inflation shock high), and seems undervalued. Bank of America
BAC
Over the last few years, Bank of America’s stock has struggled as compared to the broader index. BAC stock has seen a decline of 10% from levels of $30 in early January 2021 to around $27 now, vs. an increase of about 15% for the S&P 500 over this roughly 3-year period. However, the decrease in BAC stock has been far from consistent. Returns for the stock were 47% in 2021, -26% in 2022, and -18% in 2023. In comparison, returns for the S&P 500 have been 27% in 2021, -19% in 2022, and 14% in 2023 – indicating an underperformance for the ticker in 2022 and 2023. In fact, consistently beating the S&P 500 – in good times and bad – has been difficult over recent years for individual stocks; for heavyweights in the Financial sector including V, JPM, and MA, and even for the megacap stars GOOG, TSLA, and MSFT. In contrast, the Trefis High Quality Portfolio, with a collection of 30 stocks, has outperformed the S&P 500 each year over the same period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics. Given the current uncertain macroeconomic environment with high oil prices and elevated interest rates, could BAC face a similar situation as it did in 2022 and 2023 and lose value over the next 12 months – or will it see a recovery?
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