Bank of America is expected to report its earnings on April 15, 2025. Consensus estimates point to about $26.9 billion in revenues, up 4% compared to last year, while earnings are estimated at about $0.82 per share. Earnings could be driven by slightly higher net interest income, although the performance of other segments could be more mixed. Over Q4, the bank saw its investment banking business perform strongly, but this could be more subdued in Q1, as rising economic uncertainty and trade tensions likely caused companies to reassess their appetite for dealmaking. The company currently holds a market capitalization of $277 billion. Revenue over the last twelve months was $102 billion, and net income stood at approximately $27 billion.
Investors will be closely monitoring what the bank says about the economic outlook. U.S. markets have been volatile over the past week following President Donald Trump’s announcement of sweeping tariffs impacting over 100 countries, which he paused on Thursday. Despite the pause, the escalating trade war with China continues to pose challenges. This has raised concerns about a potential resurgence in inflation and a possible economic downturn. Such conditions could significantly affect the broader banking sector. Banks may need to allocate additional reserves to cover potential loan losses, which could weigh on profitability, while also reducing lending activity due to heightened economic risk. Bank of America’s stock has fallen roughly 19% year-to-date. If you’re looking for upside potential with lower volatility than individual stocks, the Trefis High-Quality portfolio offers an alternative — having outperformed the S&P 500 with returns exceeding 91% since inception.
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Bank of America’s Historical Odds Of Positive Post-Earnings Return
Some observations on one-day (1D) post-earnings returns:
- There are 20 earnings data points recorded over the past five years, with 11 positive and 9 negative one-day (1D) returns observed. In summary, positive 1D returns occurred approximately 55% of the time.
- Notably, this percentage rises to 75% when considering data from the past 3 years instead of 5.
- The median of the 11 positive returns = 2.3%, and the median of the 9 negative returns = -2.7%
Additional data for observed 5-Day (5D) and 21-Day (21D) returns post earnings are summarized along with the statistics in the table below.
Correlation Between 1D, 5D, and 21D Historical Returns
A relatively less risky strategy (though less effective if the correlation is low) is to evaluate the correlation between short-term and medium-term returns post earnings, identify the strongest pair, and trade accordingly. For instance, if 1D and 5D show the strongest correlation, a trader could take a “long” position for the following 5 days if the 1D return is positive. Here’s some correlation data based on a 5-year and more recent 3-year history. Note that 1D_5D represents the correlation between 1D post-earnings returns and subsequent 5D returns.
Learn more about the Trefis RV strategy that has outperformed its all-cap stock benchmark (a combination of the S&P 500, S&P mid-cap, and Russell 2000), delivering solid returns for investors. Alternatively, if you seek gains with a smoother ride than investing in a single stock like Bank of America, consider the High Quality portfolio, which has exceeded the S&P’s performance and delivered over 91% returns since inception.
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