What happened
Shares of Bank of America (BAC 0.55%) are off to a stellar start in 2022. After rising nearly 4% yesterday, the stock was up 4.3% in the final hour of trading on Tuesday. Wall Street continues to be bullish on the megabank.
So what
Barclays analyst Jason Goldberg picked Bank of America as its top money center bank for 2022 on Monday morning. Then later in the day, Stephanie Link of Hightower Advisors added Bank of America to her "Go Big or Go Home" stock picks.
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On CNBC, Link cited the bank's heavy stock repurchase program, sensitivity to higher interest rates, diversified product mix, and excess capital as part of the reasoning for her conviction. Link also said Bank of America is the "definition of operating leverage," in which revenue grows at a faster rate than expenses.
Bank of America's stock surged 47% last year as it rebounded from a difficult 2020.
Now what
Everything Link said makes sense. With the Fed projected to increase interest rates multiple times in 2022, Bank of America should see many of its loans and securities yield more as the year goes on. The bank's deposit base has improved and if there is a little bit of loan growth, that could help profits even more.
