Bank of America Shows Strong Performance Amid Credit Concerns
Bank of America Corporation (BAC), boasting a market cap of $358.7 billion, stands out as a major player in the financial services sector. Based in Charlotte, North Carolina, this company provides an array of products and services segmented into Consumer Banking, Global Wealth & Investment Management, Global Banking, and Global Markets. It serves a diverse clientele, including individuals, businesses, and governments worldwide.
Stock Performance outshines Market Trends
Over the past year, Bank of America’s stock has outshined the broader market trends. In the last 52 weeks, BAC has risen 34.1%, whereas the S&P 500 Index ($SPX) has seen an increase of 22.8%. Year-to-date (YTD), BAC stocks are up by 6.1%, compared to an increase of just 2.8% for the S&P 500.
Moreover, BAC has slightly surpassed the Financial Select Sector SPDR Fund’s (XLF) 32.1% return during the same period.
Mixed Earnings Results Concerning Investors
Despite reporting a better-than-expected Q4 earnings per share (EPS) of $0.82 and net revenues of $25.3 billion, BAC’s shares saw a minor decline. Concerns surrounding deteriorating credit quality emerged, with provisions for credit losses up by 32% and net charge-offs increasing by 23%. Even with growing net interest income, investors are wary of projected 2% to 3% hikes in non-interest expenses for 2025. A slight uptick in non-performing loans and leases also affected market sentiment.
Looking ahead to December 2025, analysts predict BAC’s EPS to grow 11.9% year-over-year to $3.67. Historically, the company has performed well against analysts’ expectations, having surpassed consensus estimates in the last four quarters.
Analysts’ Consensus Paints a Positive Picture
Among the 23 analysts covering Bank of America, the consensus rating is a “Strong Buy.” This includes 16 “Strong Buy” ratings, four “Moderate Buys,” and three “Holds.” The outlook has improved compared to three months ago, when there were only 13 “Strong Buy” ratings.
Price Targets Adjusted by Analysts
On January 18, Evercore ISI adjusted its price target on BAC to $51, while still rating it as “Outperform.” The firm acknowledged strong revenue growth and a positive outlook for 2025, but reduced its EPS estimates for FY25 and FY26 due to expected cost pressures. This adjustment contributed to a slight dip in BAC’s shares.
Currently, BAC is trading below the mean price target of $52.43, while the highest price target of $59 suggests a possible upside of 26.2% from today’s levels.
On the date of publication, Sohini Mondal did not hold any positions in the securities mentioned in this article. All data and information are for informational purposes only. For more details, please refer to the Barchart Disclosure Policy.
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The views expressed here are those of the author and do not necessarily reflect those of Nasdaq, Inc.
