Bank of America (BAC) stock is trading notably lower Wednesday after regulatory filings revealed that Warren Buffett's holding company, Berkshire Hathaway (BRK.B), sold more of its stake in the banking giant.
In a Securities and Exchange Commission (SEC) filing, Berkshire Hathaway reported the sale of about 5.8 million Bank of America shares, with the selling price ranging between $39.29 and $39.67 per share. The selling started on September 6 and ran through September 10.
All told, Berkshire Hathaway sold about 174.7 million shares of BAC stock over that time frame for about $7.2 billion, bringing its holding down to 858.2 million shares, according to CNBC. This knocks Bank of America down to the third-largest position in the Berkshire Hathaway equity portfolio, with the financial stock now perched behind Apple (AAPL) and American Express (AXP). Prior to the stock sales, Bank of America was Buffett's second-largest holding.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"I don’t know what exactly he's doing, because frankly, we can't ask him," said Bank of America CEO Brian Moynihan after being asked about Warren Buffett's selling during Barclays Global Financial Services Conference, according to CNBC. "But on the other hand, the market's absorbing the stock."
Berkshire has been paring back on its BAC stake in recent months and it halved its position in tech giant Apple (AAPL) in Q2. Buffett touched upon the selling of Apple at the annual Berkshire Hathaway meeting in May, saying he still believes in the economics of the tech giant's business but cut his stake in AAPL for tax purposes.
Is Bank of America stock a buy, sell or hold?
Bank of America has outperformed the broader market on a total return basis (price change plus dividends) so far in 2024, up 19% vs the S&P 500's 16% gain. And Wall Street is bullish on the financial stock.
According to S&P Global Market Intelligence, the average analyst target price for BAC stock is $45.53, representing implied upside of nearly 20% to current levels. Additionally, the consensus recommendation is Buy.
But not everyone has gone all in on the large-cap stock. Financial services firm CFRA Research, for instance, has a Hold rating and $39 price target on BAC stock.
The financial firm has seen "no growth on loans and deposits for the last two quarters," said CFRA Research analyst Kenneth Leon in an August 6 statement. Additionally, "BAC card income declined from late 2023 and we think the American consumer (middle class) is stressed with inflation and living costs."
Leon adds that investment banking will benefit other large banks over Bank of America. The analyst's $39 price target is roughly in line with where BAC is currently trading.
Related Content
-
Stock Market Today: Stocks Are Mixed Before Liberation DayMarkets look forward to what comes with the reordering of 80-year-old global trade relationships.
-
Stagflation: What It Is and Why Retirees Should CareStagflation — the economic bogeyman of the 1970's — may return to the US. Here's what it could mean to your retirement.
-
Stock Market Today: It's the Old Up-Down Again on Liberation DayMarkets look forward to what comes with the reordering of 80-year-old global trade relationships.
-
Can a New Manager Cure Vanguard Health Care Fund?Vanguard Health Care Fund has assets of $40.5 billion but has been ailing in recent years. With a new manager in charge, what's the prognosis?
-
What You Don't Know About Annuities Can Hurt YouLack of awareness leads many to overlook these potent financial tools, and with the possibility of running out of money in retirement, that could really hurt.
-
Three Keys to Logical Investing When Markets Are VolatileFocusing on these market fundamentals can help investors stay grounded rather than being swayed by emotion or market hysteria.
-
Yes, the Markets Are Spooked, But You Don't Have to BeIt's human nature for investors to freak out in a downturn. But with a little discipline, you can overcome the urge to sell and stay focused on long-term goals.
-
Remembering Bogle: A New Standard for Municipal InvestingImprovements in technology, data, systematic trading and risk analytics have led to more successful municipal indexing.
-
Stock Market Today: Stocks Are Mixed Before Liberation DayMarkets are getting into the freewheeling rhythm of a second Trump administration.
-
How to Invest in SportsIf it's springtime, Forbes is out with its annual list of baseball franchise values. The billions involved might make you wonder how to invest in sports.
