Bullish indicating open at $55-$60, IPO prices at $37
Investing.com - JPMorgan has maintained its Overweight rating and $48.00 price target on Bank of America (NYSE:BAC) following the bank’s second-quarter earnings report. According to InvestingPro analysis, BAC is currently trading below its Fair Value, with a P/E ratio of 13.5x, suggesting potential upside opportunity for investors.
Bank of America posted core second-quarter earnings per share of $0.87, while reported EPS came in at $0.89, representing mixed results according to JPMorgan’s analysis. The bank’s net interest income continues to recover, though only modestly in the second quarter, with acceleration expected in the second half of 2023 as low-rate swaps mature. Notably, BAC has maintained dividend payments for 55 consecutive years, with a current yield of 2.26%.
Trading remains a growth area for Bank of America, in line with industry peers. Commercial and industrial loan growth appears to be significantly driven by the bank’s Financing business growth, which is reflected in trading revenues and is partly responsible for sharp growth in loans to non-bank financial institutions. The bank’s revenue reached $97.45 billion in the last twelve months, with a 2.63% growth rate.
Deposit growth at Bank of America continues to be led by commercial deposits, resulting in a relatively flat net interest margin on a year-over-year basis. The bank’s expenses are running at a slightly higher rate than management’s original expectations due to the full-year impact of work on BSA/AML consent orders. InvestingPro subscribers can access 8 additional key insights about BAC’s financial health and future prospects through the comprehensive Pro Research Report, along with detailed valuation metrics and peer comparison tools.
While earnings exceeded some negative expectations, JPMorgan noted that investors reacted negatively to the possibility of slower recovery in net interest income, a concern compounded by the slightly higher expense growth rate. Despite these concerns, BAC maintains strong fundamentals with a market capitalization of $342.31 billion, positioning it as a prominent player in the banking sector.
In other recent news, Bank of America Corp reported its Q2 2025 earnings, showcasing an earnings per share (EPS) of $0.89, which exceeded analyst expectations of $0.86. Despite this, the company fell short of revenue projections, posting $26.5 billion against an anticipated $26.75 billion. Notably, Bank of America achieved a record net interest income of $14.8 billion, reflecting a 7% increase year-over-year. The bank continues to focus on digital transformation and AI initiatives, aiming to enhance operational efficiency. Meanwhile, Morgan Stanley (NYSE:MS) has made a significant hire by bringing on Ashish Kumbhat from Bank of America to co-lead its bank advisory group. This move is seen as part of a broader trend of anticipated increases in U.S. bank mergers and acquisitions. Morgan Stanley’s strategic hire underscores the competitive environment in financial services advisory. These developments highlight the dynamic nature of the financial sector and the continuous efforts by major banks to adapt and grow in a challenging economic landscape.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.