SoFi Stock Falls Toward Its 52-Week Low as BofA Miss Weighs on Banking Stocks

Benzinga · 1d ago

SoFi Technologies Inc. (NASDAQ:SOFI) shares are under pressure Wednesday after Bank of America reported third-quarter earnings that missed estimates.

Bank of America Misses on Earnings and Revenue as a $1.2 Billion Settlement Weighs

Bank of America reported third-quarter adjusted earnings per share of $1.08, missing the consensus estimate of $1.11. It reported revenue of $29.958 billion, missing the consensus estimate of $30.685 billion. Including a $1.2 billion regulatory settlement tied to anti-money-laundering and sanctions failures, earnings were 91 cents a share and net income fell 17% to $6.9 billion. Net interest income rose 8% to about $16.4 billion and loans grew 6%, but trading revenue came in below expectations. Fixed income trading fell 17%, and investment banking revenue dropped 11%. Bank of America shares fell about 7% to 8%. On Tuesday, JPMorgan Chase missed earnings and revenue estimates for the first time in years.

Why SoFi Is Feeling the Pressure

SoFi holds a national bank charter, so it often trades with bank sentiment, and Wednesday’s bank selloff comes alongside a hot inflation reading that pushed Treasury yields higher. SoFi is especially sensitive to rates. Keefe, Bruyette & Woods analyst Timothy Switzer reiterated an Underperform rating and cut his price target to $15 from $16 on Monday. He said rising rates and SoFi’s growing balance sheet cost the company more than $1 billion in the third quarter, a figure that excludes any relief from hedges, and he raised capital concerns tied to fair value accounting.

SoFi is trading near its 52-week low of $14.88 and is down about 40% this year, according to a CNBC report on a StoneX note. Analysts are split ahead of its third-quarter report. StoneX initiated coverage Tuesday with a Buy rating and a $25 price target, citing attractive valuation. TD Cowen kept a Hold rating on October 6 and trimmed its target to $17.50 from $18.

SoFi Shares Edge Lower

SOFI Price Action: At the time of publication, SoFi shares are trading 5.45% lower at $14.42, according to data from Benzinga Pro.

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