Bank of America (NYSE:BAC) reports its Q2 2021 earnings this week. Market participants will look for direction in its H2 guidance.
The earnings season starts in full force this week with the major players in the financial services sector reporting their financial performance for the quarter. Bank of America is one of them, scheduled to release its Q2 earnings two days from now.
Ahead of the release, Bank of America’s stock price looks bid. It is up 32.10% year-to-date and over 75% in the last twelve months. Moreover, the price action looks constructive if judged by the fact that the stock price has recovered most of the ground lost since the start of the pandemic.
Banks To Benefit from Economic Recovery
The United States economy is expected to fully recover this year from the economic recession triggered by the COVID-19 pandemic. The real GDP growth was upgraded recently in a new IMF report, and investors are looking to the central bank to start removing its lax monetary policy.
Banks are one of the first to benefit from a tightening, especially if and when the interest rates are lifted from their lower boundary. Because investors act in anticipation, the reaction on the Bank of America stock price might appear way before the moment the interest rates are actually lifted.
Analysts Are Bullish on Bank of America Stock Price
The market expects $0.76 EPS in the second quarter, an increase of 105.25% when compared to the same quarter last year. Moreover, out of the twenty-seven analysts that cover Bank of America stock price, seventeen give buy ratings, eight have a neutral rating, and only two are bearish.
Bank of America has beaten its quarterly estimates in the past four quarters, and the opinion is that it will do so in Q2 2021 as well. For traders, the forward guidance for H2 is even more important – hawkish forward guidance may help the price continue its march to a new high.