Thought On Bank Of America - What’s The EPS Going To Be?

• Bank of America (NYSE:BAC) said it had about 7.92 billion common shares outstanding as of May 26, including roughly 1.5 billion issued this month.

The above headline, reported by one of the major news services got me to think about how much money, possibly - BAC may earn - when they report earnings for the next quarter. As of 5/26/09 they have approximately 8bn shares outstanding - and they are discussing another issuance/conversion of preferred shares. This would add another 500mm shares to the share base. With 8.5bn shares outstanding - If BAC is able to earn $4bn then the EPS number would be something like $.50 per share. Then at a price of 10 or so would put the P/E at something like 20x earnings. If the company is able continue to grow or expand earnings then you would think that it might be a good risk. There’s still a lot of negative talk about commercial real estate and credit cards. My sense is that at the 11-12 values are becoming a bit stretched, given the huge expansion of the company share base.

Subscribe by RSS Subscribe by Email