Summary
Bank of America's stock is facing a number of headwinds.
A flat yield curve and slower housing sales.
Technical and options suggest the stock falls further.
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Bank of America Corp.'s (BAC) stock may still have further to fall despite being 26% off its 2018. The stock is still expensive when valuing the company on its price to tangible book value based on its historical trends. Technical analysis also suggests the stock is due to fall.
Options betting is also extremely bearish with the number of open puts heavily outweighing the calls for expiration in January. Additionally, the bank is facing many problems, including a flattening yield curve and a housing market that is in decline, which may affect loan growth. NAHB Housing Market Index was weaker than expected on December 17 coming in 57 versus estimates of 61.
Overvalued
The stock is currently trading at a price to tangible book value of 1.41, which is well off its high of 1.95. Still, the stock is trading at the upper-end of its historical range since 2010. It would suggest the stock isn't even cheap when compared to itself. Even worse, it is one of the most expensive stock's in the sector.
