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Investing.com - UBS has reiterated its Buy rating and $55.00 price target on Bank of America (NYSE:BAC) following the bank’s second-quarter earnings report. With a current market capitalization of $343 billion and trading at a P/E ratio of 13.5, InvestingPro analysis suggests the stock is currently undervalued, aligning with UBS’s bullish stance.
Bank of America reported earnings per share of 89 cents for the second quarter of 2025, which included a 6-cent benefit from a lower tax rate. The bank’s net interest income slightly missed consensus expectations, which UBS analyst Erika Najarian attributed to a larger markets balance sheet. InvestingPro data shows the bank has maintained strong financial health, with a 2.63% revenue growth over the last twelve months and an impressive track record of raising dividends for 11 consecutive years.
The bank’s fixed income, currency and commodities (FICC) trading revenue reached $3.2 billion, representing a 10% beat compared to expectations, while equities trading revenue of $2.1 billion aligned with forecasts. Investment banking fees slightly exceeded Street estimates, driven by a 24% outperformance in equity capital markets.
Bank of America maintained its fourth-quarter 2025 net interest income exit rate guidance of $15.5-15.7 billion, in line with current market expectations of $15.6 billion. The bank also indicated it expects operating leverage in the second half of 2025, though specific dollar expense guidance wasn’t provided.
The financial institution reported $5.3 billion in share buybacks during the second quarter, outperforming expectations in capital return to shareholders. UBS noted that management may face questions about capital deployment plans in a deregulated environment during upcoming investor discussions. The bank currently offers a 2.26% dividend yield, having grown its dividend by 8.33% in the last year. For deeper insights into BAC’s valuation and financial health metrics, access the comprehensive Pro Research Report available on InvestingPro, which covers over 1,400 US stocks with expert analysis and actionable intelligence.
In other recent news, Bank of America reported its second-quarter earnings for 2025, surpassing expectations with an earnings per share (EPS) of $0.89, above the forecasted $0.86. However, the company’s revenue of $26.5 billion fell short of the anticipated $26.75 billion. Despite this revenue shortfall, the bank achieved a 4% year-over-year revenue increase and a 7% rise in net interest income, reaching a record $14.8 billion. In another development, JPMorgan has maintained its Overweight rating on Bank of America, with a price target set at $48.00, following the bank’s earnings report.
JPMorgan noted mixed results in the earnings, with a modest recovery in net interest income and a slightly higher expense growth rate impacting investor sentiment. Meanwhile, Morgan Stanley (NYSE:MS) has recruited Ashish Kumbhat from Bank of America to co-lead its bank advisory group, highlighting ongoing movements in the banking sector’s leadership. Kumbhat’s notable experience includes working on significant mergers and acquisitions, such as First Citizens BancShares’ acquisition of Silicon Valley Bank. These developments underscore the dynamic shifts within Bank of America and the broader financial industry.
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