Bullish indicating open at $55-$60, IPO prices at $37
On Wednesday, Truist Securities revised its price target for Bank of America shares, reducing it to $47 from the previous $50, while still holding a Buy rating for the stock. The adjustment was announced following a reassessment of earnings projections and market conditions. Currently trading at $37.66, Bank of America, with its $285.77B market cap, has seen its stock price fall significantly over the last three months. InvestingPro data shows that 5 analysts have recently revised their earnings downward for the upcoming period.
The rationale behind the lower price target stems from updated estimates for the bank’s future earnings. Truist Securities now expects Bank of America’s earnings per share (EPS) for the year 2025 to be $3.60, a slight decrease of $0.05, and for the year 2026 to be $4.30, also down by $0.05. These revised figures are due to a more conservative outlook on investment banking revenues and loan loss provisions. Additionally, the firm anticipates a higher ongoing rate of noninterest expenses for the bank. The current P/E ratio stands at 11.34x, which according to InvestingPro analysis, is high relative to near-term earnings growth potential.
Despite these downward revisions, the forecast includes some positive adjustments. Truist Securities has factored in more robust share buybacks than previously estimated, which partially offsets the negative impacts on the bank’s financial outlook.
The new price target of $47 is based on a lower target multiple, which reflects the growing macroeconomic uncertainties and associated risks. This valuation corresponds to approximately 11.0 times the firm’s revised 2026 earnings per share estimate and represents about 1.6 times the projected tangible book value per share at the end of 2025.
The statement from Truist Securities concluded with an affirmation of the $47 price target, which aligns with their updated earnings predictions and takes into account the current economic landscape and its potential effects on Bank of America’s financial performance.
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 also exceeded revenue expectations, reporting $27.4 billion against a forecast of $26.99 billion. This robust performance was driven by increases in both net interest income and noninterest income, contributing to an 18% year-over-year EPS increase and a 6% rise in revenue. Piper Sandler revised its price target for Bank of America to $42 from $45, maintaining a Neutral rating, while adjusting its EPS estimates for 2025 and 2026. Keefe, Bruyette & Woods also lowered its price target to $52 from $55, but kept an Outperform rating, noting the bank’s satisfactory quarterly performance and potential for growth. Evercore ISI maintained its $48 price target and Outperform rating, emphasizing the bank’s financial resilience and conservative management approach. Meanwhile, CFRA reduced its price target to $47 from $53, retaining a Buy rating, and adjusted its EPS estimates for the coming years. These developments reflect various analyst perspectives on Bank of America’s recent financial results and future prospects.
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