For Immediate Release
Chicago, IL – August 7, 2012 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Bank of America Corporation (BAC - Analyst Report), MasterCard Inc. (MA - Analyst Report), Visa Inc. (V - Analyst Report), Wells Fargo & Co. (WFC - Analyst Report) and JPMorgan Chase & Co. (JPM - Analyst Report).
Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513
Here are highlights from Monday’s Analyst Blog:
BofA Pays $738M in Merchant Lawsuit
According to Bloomberg, Bank of America Corporation (BAC - Analyst Report) will shell out $738 million as compensation to retailers for a lawsuit alleging the company, along with other card companies, of charging excess debit and credit card fees. This forms a part of the largest antitrust litigation settlement in the U.S. history.
Back in 2005, about 7 million merchants had charged card companies and several big banks with fixing prices and unduly increasing processing or interchange fees on transactions made through debit and credit cards. The settlement is aimed to resolve this multi-state U.S. merchant lawsuit.
Moreover, the settlement would permit retail stores to charge the customers extra amounts for card usage. This step is taken to divert consumers’ interest towards other forms of payments.
Earlier in July, credit card giants MasterCard Inc. (MA - Analyst Report) and Visa Inc. (V - Analyst Report) entered into a formal agreement with the federal court of Brooklyn to settle this lawsuit. Accordingly, both these companies agreed to pay about $6.0 billion to the retailers. While Visa is expected to incur a cash settlement charge of $4.1 billion, MasterCard projects to record $790 million (pre-tax) as lawsuit penalty in the remaining half of 2012.
BofA has announced that nearly $539 million of the settlement amount would be carried out through the litigation escrow account maintained by Visa. The account would be funded by Visa’s class B shares, owned by BofA and other major banks.
Thirteen more banks, including Wells Fargo & Co. (WFC - Analyst Report) and JPMorgan Chase & Co. (JPM - Analyst Report) are involved in this antitrust litigation. The overall settlement is estimated to be worth $7.25 billion, by far the largest in the history of antitrust settlements.
However, the plaintiffs have not received this settlement very well. They are dissatisfied with the fact that the settlement does not minimize their difficulty of understanding the ways through which the interchange fees are fixed. Moreover, they are concerned that this would strip them of their rights to sue payment networks in the future.
The settlement concludes a long-drawn legal hassle and is expected to be a relief for BofA. Such payouts do affect the financials of a company; however, at the same time these are effective tools for enhancing goodwill.
Currently, BofA retains a Zacks #3 Rank, which translates into a short-term Hold rating. Considering the fundamentals, we also maintain a long-term Neutral recommendation on the stock.
Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
Zacks Investment Research
800-767-3771 ext. 9339