Bank of America Corp.'s first-quarter earnings reported early Tuesday beat expectations for net interest income and fee income, showcasing the bank's strong operating leverage, according to Instinet analyst Steven Chubak. "While the shares have outperformed the peer group YTD (+3%, vs. -2% at peers), this print should provide sufficient fodder for Bank of America bulls and spur continued outperformance," Chubak wrote in a note to investors. The bank reported combined revenue for global banking and markets of $9.5 billion, surpassing Instinet's $9.1 billion forecast, while FICC -- fixed income, currencies and commodities trading -- came to $2.9 billion, ahead of its $2.7 billion forecast. Investment banking revenue of $1.6 billion was ahead of Instinet's $1.4 billion estimate, reflecting strength in debt capital markets, equity capital markets and mergers & acquisition fees. The analyst rates the stock a buy and is sticking with his stock price target of $25, or 10% above its current trading level. Shares were flat in early trade, and are up just 2.9% in 2017, while the S&P 500 has gained 4.6%.
Copyright © 2017 MarketWatch, Inc.
Continue Reading Below