Opinions David Burrows
Bank of AmericaBACTOP PICKApr 19, 2017
David BurrowsStock price when the opinion was issued
As of Oct 23, 2026. Market Open.
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Very well run. Big banks can't win in every segment every quarter. Rising rates create a problem for banks, both in loan books and securities portfolios. Earnings were a bit sloppy, but no cause for alarm. Reasonable PE of ~10x. Very strong dividend yield. Strong balance sheet.
Makes sense to add on a pullback.
All bank margins have been hurt by quick rise in the price of money, which slows down lending and moves funds to GICs. He trimmed a bit. When the AI mania breaks, the S&P doesn't do very well, and people go to the bond market, he wonders how that's going to affect advisers and banks (who rely on trading volumes).
Bill Smead
After tech, the next great earnings will come from financials. Rates will moderate, spreads will continue. Broker dealers are a great business. BAC and GS are his top picks among American banks. There's a long runway for financials.
Brian Belski
The US banks are only okay. They have around 7% total returns. Citi is the turnaround story that's finally turning around. BAC is a more stable. Citi has a more global footprint. He wouldn't buy either. Valuations are a little rich. You will get stable returns, though misses at earnings from high expectations. Are better opportunities elsewhere.
It plays second fiddle to JPM. Trades at 1.3x book and 14 PE, so not expensive. The US is loosening banking regulations, so banks can buyback more shares or raise dividends or expand into other businesses. Credit cards and retail banking continue to do well.
Paul Harris, CFALast quarter was a blowout, profits rose 17% -- best EPS in nearly 2 decades, best trading quarter in 15 years. Great guidance. Sees 22% upside. Should continue to do well, wait for a pullback to add.
(Analysts’ price target is $53.00)
Brianne Gardner
Midterms shouldn't have a huge impact on money-centre banks, regardless of who holds the balance of power. Lower interest rates and a steeper yield curve are very constructive for the banks, and BAC is best able to take advantage of that. Makes its net interest margin prospects very good.
All banks were hurt somewhat by private credit worries and prospects of few rate cuts this year.
Gordon ReidUS banks haven't been performing as well as Canadian banks right now. Headwinds from slowing economy among the middle-lower class. Fear of private debt, as a lot of the big banks offer that type of fund.
What matters is direction of interest rates (lower means more business plus lower mortgage payments) as well as drop in USD (attracts foreign investors). Wait-and-see come May, when new Federal Reserve chair takes the helm. If rates are cut, US banks should come back to life.
He looks for sectors/themes that are going through significant shifts that can give a long runway for the industry and companies to be revalued. The 2nd biggest bank in the US, trading at just under 1X BV, and can go higher. Assuming they can grow BV, that would be even better. It will be helped by rising interest rates. They will get the CCAR assessment in June as to whether they can return more capital to shareholders. Generating a ton of cash, so dividends should continue to accelerate. US banks started to perform in June of last year and have just had a classic pullback towards the 150-day moving average, which gives investors a great entry point. This could be a 5-year theme. Dividend yield of 1.3%. (Analysts’ price target is $26.)