Warren Buffett's $382 Million Sale of BAC Stock and Its Implications

Warren Buffett's Recent Sale of BAC Stock

An SEC filing released on October 10 revealed that Warren Buffett sold an additional $382.4 million in Bank of America (NYSE: BAC) stock. This disclosure included three transactions that took place from October 8 to October 10, with Buffett offloading a total of 9.54 million shares.

This latest sell-off follows Buffett's previous October 3 transaction, where the Oracle of Omaha dumped $337.9 million in BAC stock.

Reduction in BAC Holdings Amid Market Competition

At press time, Berkshire Hathaway (NYSE: BRK.A) owns less than 10% of Bank of America, meaning the company will no longer need to disclose trades via Form 4 submissions, which must be filed within two business days. This provides Buffett more flexibility, yet he will still disclose holdings through regular 13-F filings.

While investor speculation surrounding Buffett's sell-off suggests foreboding expectations for BAC, recent trends indicate otherwise. Since 2020, Buffett has been gradually reducing or exiting stakes in several banks, including Goldman Sachs, JPMorgan, and Wells Fargo.

Market Response and Analyst Outlook for BAC

Despite Buffett's recent transactions, analysts remain bullish on BAC stock, issuing optimistic ratings. Of the 20 equity researchers providing ratings, 12 suggest a ‘Strong Buy’, 2 advocate a ‘Buy’, while 10 recommend ‘Hold’ ratings. Currently, there are no ‘Sell’ ratings.

Price targets appear promising, with an average forecast predicting BAC's price will reach $45.82 in a year, representing a 9.45% increase. The most optimistic target is $52, marking a potential 24.16% share price rally.

As BAC navigates a challenging environment, current market anxieties surrounding its stock might be overstated. Investors should monitor the company's upcoming earnings call scheduled for October 15 for further insights.