Key Stats for Bank of America Stock
- Price change for Bank of America stock in last 6 months: -3%
- $BAC Stock Price as of Oct. 12: $52
- 52-Week High: $65
- $BAC Stock Price Target: $65
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What Happened?
Baird upgraded Bank of America (BAC) from Neutral to Outperform on Thursday and set a $62 price target. Baird says the post-earnings sell-off was overdone.
Q3 performance was soft: adjusted EPS of $1.08 missed the $1.10 forecast, and revenue was slightly light. A $1.2 billion regulatory settlement charge cut reported EPS to $0.91.
Weak trading and investment banking also hurt, with Baird reporting adjusted pre-provision net revenue about 5% below expectations.
The core banking business looked healthy, though. Net interest income rose 8% to $16.6 billion. That’s the money the bank earns on loans, minus what it pays on deposits.
Net interest yield rose to 2.16%, up 15 basis points from last year, which means the bank is shifting money from low-yielding securities into loans.
Loans grew for the tenth quarter in a row. Average loans rose about 6% from last year and deposits reached $2 trillion.
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What the Market Is Telling Us About Bank of America Stock
Analysts on the earnings call said the stock opened down about 8%. One said it looked like a confidence problem, made worse by the regulatory settlement.
Management tried to calm those fears. The CFO said the bank has already built the remediation work into its expense base. He also said there is no asset cap, so client business isn’t restricted.
Management also gave an upbeat outlook. It expects net interest income growth of about 8% this year. It expects 8% or more in 2027.
It still targets 200 to 300 basis points of positive operating leverage, meaning revenue growing faster than costs.
Baird says Bank of America stock trades near 10 times estimated 2027 earnings, while the current P/E is 11.84.
Trading revenue was weaker, and the CFO said markets-related interest income could dip in 2027 if rates keep rising.
Still, the bank returned $8.3 billion to shareholders in the quarter. For now, Bank of America stock tells a story of strong core banking offset by a one-time hit.
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So what is Bank of America stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
