Bear Of The Day: Bank Of America

When I think about the worst customer service experiences of my life, the local post office, the DMV, my local bank and cable TV customer hotlines used to top the list. Post office workers used to make me feel like I was intruding, and DMV employees were, well, DMV employees. Surprisingly, over the last several years the government spots have pulled 180s but the private enterprises have just gotten worse.

Today’s Bear of the Day is a celebration of what may be least favorite institution to deal with, Bank of America (BAC – Analyst Report). I’m not going to sit up here and sully their reputation. I’m sure there are plenty of BAC locations that are run very well, full of smiling bankers and tellers that never screw up your deposit. Let’s just say that if you needed a buddy to run to the bank with I’m not your guy.

I’m one of those unapologetic capitalists that will buy a stock even if I hate the company, if I think it’s going to make me some money. Well, with Bank of America I don’t have that moral dilemma. The major regional bank industry ranks in the Bottom 9% of our Zacks Industry Rank. Helping to tug that down is Bank of America and their Zacks Rank #5 (Strong Sell).

Looking at estimates for the current year, 12 analysts have dropped their earnings estimates for the current year while 8 have done so for next year. The bearish attitude has cut our Zacks Consensus Estimate from $1.56 to $1.47 for the current year and lowered next year’s estimates from $1.74 all the way down to $1.66.

Shares of BAC have been under pressure but have bounced impressively off the February lows. After trading above $18 last November, shares began a breathtaking slide that brought the price down to $11. The move higher above $13 to start March still sits below a narrow retracement high into late January that saw shares recover above $14. Watch for potential resistance at $13.42 which happens to be the 38.2% retracement of the move from late December to the February lows.