Summary
Bank of America has seen a significant price drop this year.
However, with loan growth in line with last year's coupled with strong equity performance, I believe this may be an overreaction.
I anticipate upside in this stock should equity markets recover.
At the beginning of this year, I made the argument that Bank of America (BAC) would continue to see upside even in spite of a high price to book ratio.
Back then, the stock was trading at $30 and has since descended to just under $25 at the time of writing:
Source: ycharts.com
Given the downward action we have seen in the S&P 500, it is not surprising that we have been seeing a fall in price.
That said, it has been considerably more than the overall market. For instance, we can see that since May, the S&P 500 is up by 1.58% in spite of a more recent decline while Bank of America is down by over 17%:
