Bank of America (BAC) is currently trading at $17.62 per share, with a 52-week high of $18.48 and a 52-week low of $14.97. At the prevailing share price the company has a market capitalization of $184.13 billion with a Price/Earnings ratio of 18.36 and an EPS (Earnings Per Share) of 0.96. The 1-year target estimate for the stock is $19.26. On the scale of 1.0 (strong buy) to 5.0 (sell) Bank of America is rated at 2.2. When we analyze the upgrades and downgrades history from 2015 to date, there have been 3 downgrades and one upgrade. The latter was by the research firm Argus on July 17, 2015 from hold to buy.

Bank of America Year to Date Performance:

On the 22nd September Bank of America shareholders will make a decision as to whether the current chairman and CEO – Brian T. Moynihan will retain his job. Moynihan has been front and center with what could be the third reduction of share buybacks and dividends during his tenure. A week after shareholders decide on his fate (September 30, 2015), Bank of America will be submitting its strategic plans to the Federal Reserve Bank. Earlier in March 2015, the Fed found various weaknesses in Bank of America’s capital plan and these are going to be scrutinized closely. As the 2nd largest banking company in the U.S., Bank of America has been making one of the smallest payouts of all banks in the country. If the banking giant fails to make the grade with the Fed, many shareholders would rather see the back of Moynihan or at the very least a separation of Chief Executive Officer and Chairman roles. That Moynihan has been central to the resubmission to the Fed is a factor that is weighing heavily on investor sentiment vis-à-vis Bank of America futures. Already the bank has invested hundreds of millions of dollars in updating data systems.

From Mega Debt to Sizable Returns:

Bank of America Net Interest Income 2014/15

Bank of America has somewhat of a poor track record when it comes to Fed stress tests. In July, Bruce Thompson – the former CFO of Bank of America – resigned after being involved in two failures with the Fed. This time around however, it is the CEO and Chairman who will face shareholders without his right-hand man. Bank of America is uncertain what factors the Fed will be evaluating in its upcoming stress test.

For his part, Moynihan has a great deal of regret, following the enormous costs of acquiring Countrywide Financial Corporation. That mortgage lender ended up costing Bank of America $70 billion. That the CEO claims this failure as his greatest success is an accomplishment of sorts. In Q2, 2015 Bank of America generated profits of over $5.3 billion. What really remains a problem for Bank of America is the low dividend. It was $0.64 per share, but it has plummeted since. In 2014 the Fed allowed a dividend increase of $0.05 per share.

Bank of America may well pass the ‘stress test’ – since Citigroup Inc. (C) did in March this year. There is a lot of discontent about too much power being vested in the hands of the current CEO. On the flip-side of the coin, Warren Buffet invested over $5 billion in Bank of America in 2011 and he routinely touts his decision for having done so. For 2015, the stock has shaved 1.1% off the top, and since Brian T. Moynihan assumed the CEO role the share price has risen 17%.

Did you know this about Bank of America?

• Investors will be bullish about news that all three major credit rating agencies have recently upgraded the status of Bank of America
• Bank of America pays 2.33% interest on long-term debt – second only to Citigroup and ahead of U.S. Bancorp (USB) at 2.05%, JP Morgan Chase (JPM) at 1.52% and Wells Fargo (WFC) at 1.34%
• 2014 net income totaled $4.8 billion on revenues of $85.1 billion
• Net income for the 6-month period ending June 30th 2015 was $8,677 billion – up by over $6.650 billion year on year.

Based on the positive developments at the bank, investors will be likely to hold the stock ahead of the September stress test, or buy prior to the shareholder vote on the fate of the CEO and Chairman. All signs are definitely a lot more bullish, but caution remains the order of the day.