Earnings Previews: Bank of America, BNY Mellon, Charles Schwab

The following three companies are set to report quarterly results before Monday’s opening bell.

Bank of America

Shares of Bank of America Corp. (NYSE: BAC) have dropped by about 31.4% over the past 12 months. Like the other big banks, the decline in investment banking has hit revenue totals hard, and the mostly dormant IPO market is not expected to turn around in either the third or fourth quarters. Coupled with lower mortgage lending, expectations are not high, nor are expectations for the current quarter.

Analysts are bullish on BofA, with 17 of 26 putting a Buy or Strong Buy rating on the shares. The rest rate the stock at Hold. At a recent price of around $29.90 a share, the implied gain based on a median price target of $40.00 is 33.8%. At the high price target of $55.00, the implied upside is almost 84%.

Third-quarter revenue is forecast at $23.48 billion, which would be up by about 3.5% sequentially and by 3.1% year over year. Adjusted EPS are expected to come in at $0.78, up 6.2% sequentially but down 8.2% year over year. For the full 2022 fiscal year, analysts forecast EPS of $3.18, down 11%, on revenue of $93.58 billion, up about 5%.

BofA’s stock trades at 9.4 times expected 2022 EPS, 8.1 times estimated 2023 earnings of $3.69 and 7.4 times estimated 2024 earnings of $4.04 per share. The stock’s 52-week trading range is $29.48 to $50.11. The low was posted Wednesday. BofA pays an annual dividend of $0.88 (yield of 2.96%). Total shareholder return for the past 12 months was negative 29.9%.

Bank of New York Mellon

Bank of New York Mellon Corp. (NYSE: BK) has dropped nearly 33% from its share price over the past 12 months and 36% to date in 2022. Like BofA, the bank posted a new 52-week low on Wednesday after receiving authorization from the Kansas City Fed to serve as a custody bank of cryptocurrency. Custodia, a crypto bank that has been waiting for nearly two years for the same designation, immediately filed suit. For BNY Mellon, it is not that big a deal, according to the Wall Street Journal. The bank has about $43 trillion in assets under custody or administration. The potential from crypto tops out at $920 billion.

Of the 17 analysts covering the stock, only eight awarded the shares a Buy or Strong Buy rating, and the other nine have Hold ratings. The median price target on the stock is $46.00, and at a recent price of around $37.30 the upside potential is around 23.3%. At the high target of $61.00, the potential upside is nearly 63.5%.