Company Update (NYSE:BAC): Bank of America Corp Report Showcases Positive Impacts of $125 Billion Environmental Business Initiative


Bank of America Corp (NYSE:BAC) released a report detailing how a $12.6 billion subset of the banking giant’s $125 billion environmental business objective has boded well for both the economy as well as the environment: “Banking on a Low-Carbon Economy: The Economic Impacts of Bank of America’s $125 Billion Environmental Business Initiative.” With consulting firm EY behind the helm of the analysis, this report investigates BAC’s focus on projects within the United States financed between the years 2013 and 2016.

Over the four-year period examined, the analysis found Bank of America’s financing:

  • Supported an annual average of 39,728 jobs, nearly half of which pay significantly higher than the U.S. average compensation and resulted in $9.6 billion in labor income.
  • Realized a cumulative $29.9 billion economic output.
  • Contributed a cumulative $14.8 billion to GDP.
  • Funded projects that have helped prevent 2,376,100 metric tons of greenhouse gas emissions in 2016 alone – the equivalent of taking more than half a million cars off the road for one year.

“We know that committing capital to a clean energy future creates jobs and business opportunities,” said Anne Finucane, vice chairman, Bank of America. “This analysis validates once again that our focus on responsible, sustainable growth is helping the economy while addressing important societal issues.”

The report findings follow up on a 2014 EY analysis that provided a comprehensive look at the environmental benefits of Bank of America’s $125 billion commitment, the results of which were published in “Financing for a sustainable future: Estimating the environmental benefits of Bank of America’s Environmental Business Initiative.”

“Bank of America has shown leadership with its long-term commitment to environmental finance,” said Michael Liebreich, chairman of the Advisory Board, Bloomberg New Energy Finance. “It has now demonstrated convincingly that addressing climate change can be an economic opportunity for society – one that pays dividends in terms of well-paid jobs, fast-growing industries and a lower-risk economy.”

In 2015, Bank of America increased the company’s second environmental business initiative from $50 billion to $125 billion in low-carbon business by 2025 through lending, investing, capital raising, advisory services and developing financing solutions for clients around the world. This followed the company’s first environmental business initiative for $20 billion, established in 2007, and achieved four years ahead of schedule. Since 2007, Bank of America has provided approximately $70 billion in financing for low-carbon and sustainable business activities. (Original Source)

Shares of Bank of America are rising 0.29% in pre-market trading Monday, or up $0.07 to $24.45. BAC has a 1-year high of $25.80 and a 1-year low of $14.81. The stock’s 50-day moving average is $24.00 and its 200-day moving average is $23.80.

On the ratings front, Bank of America has been the subject of a number of recent research reports. In a report issued on September 14, Jefferies Co. analyst John Difucci reiterated a Buy rating on BAC, with a price target of $28, which implies an upside of 15% from current levels. Separately, on August 30, RBC’s Gerard Cassidy reiterated a Buy rating on the stock and has a price target of $26.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, top analysts John Difucci and Gerard Cassidy have a yearly average return of 17.7% and 24.5% respectively. Difucci has a success rate of 76% and is ranked #20 out of 4651 analysts, while Cassidy has a success rate of 81% and is ranked #3.

Overall, 3 research analysts have assigned a Hold rating and 8 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $27.55 which is 13.0% above where the stock closed on Friday.