Bank of America Q2 net income rises on higher trading activities

Overview
U.S. banking giant’s Q2 net income rose 27% year-on-year, while EPS increased 34% year-on-year. Q2 revenue climbed 15% year-on-year to $31.6 billion, driven by higher net interest income. The company also returned $8 billion to shareholders through dividends and share repurchases.


Outlook

The company said it is in a good position to serve clients, deliver for shareholders, and support a growing economy.


Result Drivers
Higher net interest income supported overall revenue growth in the quarter. Strong asset management and investment banking fees also contributed to topline performance. Efficiency improved, with the ratio at 59%, reflecting disciplined expense management. Sales and trading revenue rose to $7.1 billion, including net debit valuation adjustment losses of $57 million, marking a 33% increase both including and excluding DVA impact.


Key Details
Q2 EPS stood at $1.21, while net income came in at $9.10 billion.


Analyst Coverage
The current average analyst rating on the stock is “buy”, with 20 “strong buy” or “buy” ratings, 5 “hold”, and no “sell” or “strong sell”. The average consensus recommendation for the bank’s peer group is also “buy”. Wall Street’s median 12-month price target for Bank of America Corp is $65.00, about 9.2% above its July 13 closing price of $59.50.