Bank of America Corp (NYSE: BAC) announced that it has agreed to sell its consumer credit card business in the United Kingdom, MBNA Ltd., to Lloyds Banking Group.
The sale completes the transformation of Bank of America’s consumer credit card business from a multi-country, multi-brand business to a single-brand business serving core retail customers in the United States. The transaction is expected to close by mid-2017, subject to regulatory approval. Depending on closing conditions, Bank of America expects to record a minimal after-tax gain associated with the sale. The U.K. consumer credit card portfolio has approximately $10 billion in credit card receivables. The transaction does not impact Bank of America’s global commercial card business, which is part of Global Transaction Services. (Original Source)
Shares of Bank of America are currently rising 0.36% to $22.56, or up $0.08 in pre-market trading Tuesday. BAC has a 1-year high of $23.39 and a 1-year low of $10.99. The stock’s 50-day moving average is $20.22 and its 200-day moving average is $16.25.
On the ratings front, Bank of America has been the subject of a number of recent research reports. In a report issued on December 15, Raymond James analyst Michael Rose upgraded BAC to Buy, with a price target of $26, which represents a potential upside of 16% from where the stock is currently trading. Separately, on December 6, CLSA’s Mike Mayo maintained a Buy rating on the stock and has a price target of $25.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Michael Rose and Mike Mayo have a yearly average return of 16.8% and 5.2% respectively. Rose has a success rate of 78% and is ranked #116 out of 4288 analysts, while Mayo has a success rate of 63% and is ranked #1163.
Sentiment on the street is mostly bullish on BAC stock. Out of 18 analysts who cover the stock, 11 suggest a Buy rating and 7 recommend to Hold the stock. The 12-month average price target assigned to the stock is $19.20, which implies a downside of 15% from current levels.