Bullish indicating open at $55-$60, IPO prices at $37
On Wednesday, RBC Capital Markets adjusted its outlook on Bank of America stock, lowering the price target to $45 from the previous $50, while still maintaining an Outperform rating. The revision reflects a cautious stance amid economic uncertainties while acknowledging the bank’s robust fundamentals. The stock, currently trading at $37.60, has seen a 10% decline over the past six months. According to InvestingPro analysis, BAC is currently fairly valued, trading at 11.15x earnings with a market capitalization of $284 billion.
Bank of America’s diversified business model has shown resilience in the face of economic challenges, according to RBC Capital analysts. The company’s strategy of accumulating deposits and expanding its loan portfolio is expected to support stronger earnings growth in the long term. RBC Capital’s analysts highlighted the bank’s core low-cost deposit base as its most valuable asset, anticipating it will perform particularly well in the coming 12 months. InvestingPro data reveals the bank has maintained dividend payments for 55 consecutive years, with an impressive 8.3% dividend growth in the last twelve months.
The analysts also noted the significant de-risking measures that Bank of America has implemented over the past 15 years. They believe these efforts will allow the bank to effectively navigate through a potential slowdown in the U.S. economy and the associated impacts on credit trends, without incurring substantial damage to its net income or capital. With revenue of $97.5 billion in the last twelve months and a 2.6% growth rate, InvestingPro analysis shows the bank maintains a solid financial position. For deeper insights into BAC’s financial health and future prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
Gerard Cassidy of RBC Capital provided commentary on the bank’s current position. "BAC’s Results Show the Heartbeat of American Banking; BAC’s diversified business model continues to demonstrate its ability to navigate through uncertain times," said Cassidy. The analyst expressed confidence in the bank’s capacity to manage upcoming challenges and leverage its deposit growth through loans, which should lead to enhanced long-term earnings growth.
In summary, while the price target adjustment indicates a more conservative view of Bank of America’s near-term prospects, RBC Capital’s continued Outperform rating signals a belief in the bank’s underlying strength and its potential to outperform despite an expected economic downturn.
In other recent news, Bank of America has experienced several adjustments from financial analysts. The bank’s first-quarter earnings for 2025 showed robust performance, with earnings per share (EPS) rising to $0.90, an 18.4% increase from the prior year, and revenue climbing 6.2% to $27.4 billion. Despite these strong results, multiple firms have revised their price targets for the bank. Truist Securities lowered its target to $47 while maintaining a Buy rating, citing a more conservative outlook on earnings and market conditions. Piper Sandler also adjusted its target to $42, retaining a Neutral rating, following a reassessment of earnings projections. Keefe, Bruyette & Woods reduced its target to $52 but kept an Outperform rating, noting the bank’s solid quarterly performance. Evercore ISI maintained its $48 target and Outperform rating, emphasizing Bank of America’s financial resilience and preparedness for economic challenges. Similarly, CFRA cut its target to $47, keeping a Buy rating, based on a revised risk premium and forward P/E ratio. These developments reflect a cautious yet optimistic view of Bank of America’s future prospects amid evolving market dynamics.
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