Bank of America pulled back modestly into the end of June, losing the $57.88 high it printed last week and closing Tuesday at $56.98 — but the pre-earnings setup remains more constructive than defensive.
The week's most notable shift is in options. The put/call ratio has dropped to 1.10, now running about one standard deviation below its 20-day average of 1.25 and close to its 52-week low of 1.08. That is a meaningful rotation: as recently as mid-June the PCR was pushing 1.50, which reflected genuine hedging demand. The current reading suggests call positioning has reasserted itself, consistent with investors leaning into the July 14 Q2 earnings date rather than protecting against it. Borrow conditions add little drama to the picture. Short interest eased a further 9% on the week to 1.34% of the free float — now near its lightest reading across the entire 90-day window — and availability is essentially unconstrained at the cap of the measurement range. Cost to borrow has climbed 48% over the week but still sits at just 0.50%, a level that carries no real squeeze risk for a bank of this size and float. Positioning looks constructive rather than crowded.
The Street lined up further behind the bull case this week. Morgan Stanley's Betsy Graseck raised her target from $61 to $67 while holding Overweight on Monday, the most bullish of three successive target increases from Citi ($62 to $66, Buy) and Truist ($61 to $64, Buy) that came in over the prior five sessions. The consensus sits at Buy with 15 buys against just three holds, and the mean target of $64.12 implies roughly 12% upside from current levels. The one wrinkle: Oppenheimer downgraded to Perform from Outperform on Tuesday with no replacement target, a move that breaks the otherwise uniform upward drift in analyst sentiment. On valuation, the stock trades at 12.1x trailing earnings and 1.38x book — the price-to-book multiple has expanded by 0.13x over the past month, reflecting the stock's near-11% gain in June. The bull case rests on 9% net interest income growth and a 21% year-on-year jump in consumer banking net income. Bears point to a CET1 ratio that slipped to 11.2% and a declining supplementary leverage ratio, arguing capital headroom is narrowing just as macro risks build.
Insider activity is worth flagging in context, not as a warning. CEO Brian Moynihan sold 18,083 shares on June 15 at $55.87 for just over $1 million — the same award-then-sell pattern he executed in April and May, consistent with a structured vesting programme rather than a directional view. Chief Risk Officer Geoffrey Greener sold a more substantial $6.7 million worth in early May at $53, though that filing predates the stock's further leg higher. Neither transaction reads as an unusual signal.
Recent earnings prints have been muted. The April 15 Q1 release produced a one-day move of essentially zero, followed by a 0.4% drift over the subsequent week. The prior print in May moved the stock down just 0.2% on the day before a 5% five-day decline. The pattern is: no gap, but some post-earnings drift. With the ORTEX short score sitting at a subdued 31 and options positioning near the bullish extreme of the past year, the July 14 Q2 release is less about whether the bank is growing — the bull case on NII and investment banking looks well-supported — and more about whether the capital ratios and macro guidance give the bears anything concrete to push back with. Citigroup and JPMorgan both dropped harder than BAC on the week, falling 3.5% and 2.0% respectively, while Wells Fargo shed 1.8%; the relative outperformance keeps BAC in a stronger pre-earnings posture than most of its large-cap peers.
The next two weeks narrow to a single event: how Moynihan frames the NII trajectory and whether the CET1 trajectory stabilises when results land on the morning of July 14.
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