Bank of America Corp'.s (BAC) 4% jump on Monday after a second-quarter revenue beat shows that investors are shrugging off fears of a trade war and a slowing economy, said Stephen Biggar, director of financial institution research at Duggar Research.
On Monday, Bank of America had its best day since March 26 after it announced that second-quarter revenue grew 33% to $6.8 million, compared with the same period of 2017. Commercial lending grew 5% and consumer lending rose 6% year-over-year. The company's stock rose 4.3% to $29.78.
Four major banks also rallied Monday with JPMorgan Chase (JPM) rising 3.93% to $110.58 and PNC Financial Services (PNC) bouncing 1.86% to $140.89. Wells Fargo (WFC) rose 2.98% to $56.99 and Citigroup (C) gained 3.7% to $69.46.
"The lending volume on the commercial side was strong and the credit quality still good," Biggar said. "It was a pretty good quarter for (BAC) -- mostly sustainable things besides a change in a tax rate or a good quarter for trading."
Biggar maintained a target price of $35 for Bank of America stock on Monday.
Jeffery Harte, an analyst for Sandler O'Neill, set a 12-month price target of $36 for the company's shares.
The banks "all had pretty good quarters," Harte said. "The outlook commentary we got from (BAC) management was pretty much across-the-board reiterating their previous guidance if not being incrementally more bullish," Biggar said. "I think investors are looking and saying, 'capital markets and investment business has held up pretty well.'"
Bank of America has been a client of Harte's firm Sandler O'Neill within the past 12 months and receives non-investment banking securities related services from Sandler O'Neill.