Should I buy Bank of America shares in January 2022?

Bank of America Corporation (NYSE: BAC) shares have advanced more than 40% since the beginning of the 2021 year, and the current price stands at $44.

UBS expects significant upside potential for banks’ stocks, and according to UBS analysts, Bank of America represents a top pick.

Outlook remains positive

Bank of America shares continue to trade in a bull market after the U.S. Federal Reserve increased the reduction in bond-buying on a monthly basis from $15 billion to $30 billion.

Pulling off support programs is the first step towards tightening, and the chances of two or three rate hikes in 2022 have increased.

A hawkish turn should have a positive influence on the U.S. dollar and treasury yields, while shares of banks should continue to be supported.

This week, JPMorgan analyst Vivek Juneja said that U.S. commercial banks, including Bank of America, are likely to see growing net interest income in 2022 as long-term yields rise.

JPMorgan analyst Vivek Juneja also said that net interest income should rise next year due to moderate loan growth, and he highlighted Bank of America as a good stock pick that should benefit from the rise in long-term rates plus future rate hikes.

UBS analysts, led by Keith Parker and Erika Najarian, said that they expect significant upside potential for banks’ stocks, and according to them, Bank of America represents a top pick. Keith Parker, an analyst from UBS, said:

A number of factors point to 20%+ potential upside for banks over the next year, including a rise in short+long rates with greater EPS sensitivity, loan growth, QE ending, dividend growth, and valuations not discounting resilient quality plus earnings upside.

Bank of America has proven its stability, and CEO Brian Moynihan said that consumer spending had surpassed pre-pandemic levels, deposit growth remains strong, and loan levels have begun to grow.

Bank of America continues to move in the right direction, profit is expected to grow in the upcoming quarters, and its dividend remains safe.

Bulls control the price action Data source: tradingview.com

Bank of America shares have advanced more than 40% since the beginning of January 2021, and according to technical analysis, shares of this bank remain in a buy zone.

Rising above $50 resistance supports the positive trend, and the next price target could be around $53.

Summary

Bank of America Corporation shares have advanced more than 40% since the beginning of 2021 year, and according to UBS analysts, Bank of America shares could advance even more. JPMorgan analyst Vivek Juneja also said this week that U.S. commercial banks, including Bank of America, are likely to see growing net interest income in 2022 as long-term yields rise.

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