Analyst Explains Why He’s Selling Bank of America (BAC) and Holding ‘Very Large’ Stake in Goldman Sachs

Core Insights - Bank of America Corporation (NYSE:BAC) is experiencing mixed sentiments among analysts, with some recommending selling the stock while others see potential for growth in its revenue and profitability [1][2]. Group 1: Analyst Perspectives - Steve Weiss, a prominent analyst, is selling Bank of America due to a desire to reduce overall market exposure, despite having held the stock for a long time. He prefers to maintain a large position in Goldman Sachs, which he believes aligns better with his investment focus on underwriting cycles and investment banking [1]. - Ariel Global Fund initiated a position in Bank of America, citing underappreciated revenue momentum in its capital markets group and an expectation for net interest income growth to exceed Wall Street forecasts. They also highlight a favorable regulatory environment that could enhance share buybacks [2]. Group 2: Investment Outlook - The earnings outlook for Bank of America is viewed as attractive, supported by higher profitability and free cash flow generation in an improving operating environment. However, the fund expresses a belief that certain AI stocks may offer greater potential for higher returns with limited downside risk compared to BAC [2].