Bullish indicating open at $55-$60, IPO prices at $37
On Wednesday, Piper Sandler adjusted the price target for Bank of America stock (NYSE:BAC), decreasing it to $42.00 from the previous $45.00, while retaining a Neutral rating on the shares. The adjustment follows Bank of America’s first-quarter earnings for 2025 and updated guidance, which prompted a revision of earnings per share (EPS) estimates by the research firm. According to InvestingPro data, BAC currently trades at a P/E ratio of 11.34x, with the stock down 13% year-to-date, suggesting potential valuation concerns amid broader market uncertainties.
The revised estimates by Piper Sandler now reflect a 2025 EPS increase from $3.61 to $3.67, acknowledging the bank’s reported earnings in the first quarter which surpassed the firm’s expectations. However, the projection for 2026 sees a slight decrease in EPS from $4.09 to $4.03. The change in the price target to $42 is attributed to overall lower equity valuations for banks, although the target still represents approximately 11 times the firm’s estimated 2025 EPS for Bank of America. InvestingPro analysis reveals that five analysts have recently revised their earnings downward for the upcoming period, while the bank maintains its impressive 55-year streak of consistent dividend payments, currently yielding 2.74%.
In a statement, Piper Sandler’s analyst said, "Fine-tuning EPS estimates. We are simply fine-tuning our EPS estimates following BAC’s 1Q25 earnings and updated guidance. Specifically, our 2025E EPS goes from $3.61 to $3.67 (reflects in part the 1Q’s reported outperformance relative to our exp.), though our 2026E EPS goes from $4.09 to $4.03. Our PT goes from $45 to $42 based on lower bank equity valuations (still ~ 11x our 2025E EPS but fine-tuned downward). We are keeping our Neutral rating."
The firm’s stance remains unchanged, with the Neutral rating indicating that the analysts do not foresee significant stock movement for Bank of America in either direction in the near term. The updated guidance and earnings figures from the bank have been critical factors in these revised estimates and price target.
Bank of America, one of the leading financial institutions in the United States with a market capitalization of $287.74 billion, has not publicly responded to the revised price target and EPS estimates by Piper Sandler. The bank’s stock performance will continue to be watched closely by investors as it navigates the financial landscape post its first-quarter earnings report for 2025. InvestingPro maintains a FAIR overall financial health score for BAC, with additional insights available in the comprehensive Pro Research Report, which provides deep-dive analysis of the bank’s performance metrics and future prospects.
In other recent news, Bank of America reported stronger-than-expected earnings for the first quarter of 2025, with earnings per share (EPS) of $0.90, surpassing analysts’ forecasts of $0.82. The company’s revenue also exceeded expectations, reaching $27.4 billion compared to the anticipated $26.99 billion. CFRA revised its price target for Bank of America to $47, down from $53, while maintaining a Buy rating. This adjustment was influenced by a modified risk premium and revised earnings per share estimates for the upcoming years. Evercore ISI maintained its Outperform rating on Bank of America, with a price target of $48, highlighting the bank’s robust performance due to higher trading revenues and a lower tax rate. Keefe, Bruyette & Woods (KBW) also adjusted its price target for the bank to $52 from $55 but kept an Outperform rating, noting a solid quarterly performance. These developments reflect the bank’s ongoing financial resilience and strategic focus on growth across various business segments.
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