Bank of America Corp. (NYSE:BAC) is set to report FQ2 2014 earnings before the market opens on Wednesday, July 16th. Most analysts predicted a contraction in earnings from a majority of the banks this earnings season including Bank of America. Although Wells Fargo (NYSE:WFC) reported in-line with Wall Street’s expectations, stronger than anticipated results from Citigroup (NYSE:C), JPMorgan Chase (NYSE:JPM), and Goldman Sachs (NYSE:GS) all indicate that the banks may be in for a better earnings season than previously thought.
Over the previous 6 quarters, crowdsourced forward looking financial estimates platform Estimize.com has been more accurate than Wall Street in forecasting Bank of America’s earnings per share and revenue 4 times each. This quarter 40 contributing analysts on Estimize.com have come to a consensus earnings expectation of 31c EPS and $21.976B in revenue compared to a consensus of 29c EPS and $21.614B from Wall Street.
Estimize.com allows the ranking and sorting of analysts by accuracy, the analyst with the lowest error rate on Bank of America with at least 2 estimates scored is an anonymous student who goes by the username anmikyoso. Estimize is completely open and free for anyone to contribute, and the base of contributing analysts on the platform includes hedge fund analysts, asset managers, independent research shops, non professional investors, and students.
The Estimize consensus was more accurate than the Wall Street consensus 65% of the time last quarter on the coverage of nearly 1000 stocks. A combination of algorithms ensures that the data is not only clean and free from people attempting to game the system, but also weighs past performance and many other factors to gauge future accuracy.
Last quarter, Bank of America reported a surprising earnings miss, coming in well below the bottom of the range of estimates from either Estimize (indicated by the blue rectangle) or Wall Street (gray rectangle). Over the past 2 years Bank of America has beaten the Wall Street earnings consensus 5 times out of 8 and better than expected results from 3 of the 4 banks that have reported so far this earnings season are leading the Estimize community to believe that a modest earnings beat is around the corner for Bank of America.
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The high magnitudes of the earnings beats from JPMorgan, Citigroup, and Goldman Sachs may lead investors to be bullish on the other banks set to post earnings this week including Bank of America and (NYSE:MS). However, even if Bank of America does manage to the beat the Wall Street consensus and report 31c EPS, in-line with the Estimize consensus, those results would still represent a penny per share loss on a year over year basis from the 32c EPS reported in the second quarter of last year.
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