Bank of America Stock (BAC) Nears Record High as Pivotal Earnings Report Looms

Bank of America (BAC) is scheduled to report its Q2 2025 earnings on July 16, with analysts forecasting $0.90 per share, reflecting modest 8% year-over-year growth. I believe BAC is well-positioned to beat expectations, supported by conservative loan loss provisioning, ongoing share buybacks, strength in its Global Markets division, and higher net interest income amid slower-than-expected Federal Reserve rate cuts.

BAC stock currently trades at $45, within striking distance of its all-time high of $47 per share. With resistance clearly set, BAC stock will need a strong catalyst to make further headway beyond $50 per share.

Given the lack of clear catalysts, I remain Neutral on BAC stock. It currently trades at 1.66x tangible book value and 12.6x 2025 earnings—a valuation that’s lower than peers like JPMorgan Chase (JPM), but still richer than that of many U.S. regional banks.

Macroeconomic Assumptions Underpin BAC Sentiment

Heading into Q2 2025, Bank of America’s provisioning appears notably conservative. The bank’s macroeconomic outlook assumes an unemployment rate of just below 5% by the end of 2025, remaining at that level through 2026, which is slightly more pessimistic than the Federal Reserve’s projection of 4.5% for both years.

Similarly, Bank of America forecasts 1% GDP growth in Q4 2025, undercutting the Fed’s more optimistic estimate of 1.4%.

In short, Bank of America’s current reserves already reflect a cautious economic view, making it unlikely to build a significant provision in Q2 2025. The bank appears to have already accounted for a moderate economic slowdown later this year and into 2026.

Q2 2025 Earnings Preview

Analysts expect Bank of America to deliver earnings of $0.90/share in Q2 2025, up 8% year-over-year. This would represent a marked slowdown from the 18% annual increase observed in the first quarter of 2025.

I believe the projected 8% EPS growth is overly conservative. Based on my estimates, share repurchases alone could contribute around 5% EPS growth. Additionally, Bank of America is likely to raise its net interest income (NII) guidance, as the Federal Reserve is now expected to deliver only two rate cuts in 2025, compared to the four cuts the bank had initially anticipated in its own outlook.

I also expect slightly stronger performance from the Global Markets division, supported by heightened market volatility early in Q2 2025, which could contribute a paltry $0.02 per share to earnings.

In summary, I expect Bank of America to modestly beat consensus earnings estimates, driven by conservative provisioning, upward NII revisions, and a slight lift from trading activity. My forecast is EPS of approximately $0.92 for Q2 2025.

Bank of America Valuation

Based on my projections, Bank of America is on track to deliver earnings of approximately $3.57 per share in 2025, assuming consistent 8% growth in both Q3 and Q4 of 2024. This would translate to a return on tangible book value of around 13% for the year.

However, this solid profitability appears to be largely priced in, with BAC stock trading at 1.66x its tangible book value of $27.12 per share. Its 2025 P/E multiple of 12.6x is more attractive than that of large peers like JPMorgan Chase (14.6x), but still above the average for regional banks, which trade closer to 10.7x forward earnings.

Looking ahead to 2026, earnings growth is expected to moderate, with no repeat of the Global Markets tailwind and potential pressure from anticipated Fed rate cuts. Given this outlook, I believe a Hold rating is appropriate for BAC at current levels.

This cautious stance is also supported by Berkshire Hathaway’s ongoing reduction in its BAC stake, despite the stock remaining the firm’s fourth-largest holding, which comprises 10.19% of Buffett’s portfolio. The limited upside potential suggests it’s wise to stay neutral for now.

Is Bank of America a Buy, Sell, or Hold?

Turning to Wall Street, Bank of America earns a Strong Buy consensus rating based on 18 Buy and 2 Hold ratings over the past three months. Notably, not a single analyst is bearish on Bank of America. The average BAC stock price target is $49.38, implying a 9% potential upside.

See more BAC analyst ratings

Limited Upside for BAC Stock Despite Solid Earnings Outlook

Bank of America’s macroeconomic outlook remains more conservative than the Federal Reserve’s, which suggests its earnings are better insulated in the event of a slowdown in U.S. economic activity later in 2025 and into 2026.

I expect BAC to slightly beat Q2 2025 earnings estimates, supported by stronger net interest income, continued share repurchases, and a modest profitability boost from the Global Markets division.

That said, I remain neutral on the stock. Like Warren Buffett, who has recently trimmed Berkshire’s position in BAC, I believe the bank’s solid profitability is already reflected in the stock’s price, which trades at 1.66x tangible book value.

Lastly, while Wall Street analysts maintain a Strong Buy rating, the implied upside of just 9.59% suggests limited near-term reward for new investors at current levels.