Bank of America: Navigating Renewable Energy Tax Changes with Strategic Investments

Bank of America (BAC – Research Report), the Financial sector company, was revisited by a Wall Street analyst yesterday. Analyst Betsy Graseck from Morgan Stanley maintained a Buy rating on the stock and has a $47.00 price target.

Betsy Graseck’s rating is based on the potential for Bank of America to benefit from the current legislative environment surrounding renewable energy tax credits. The Senate’s draft tax bill aligns with the House bill in phasing out these credits, which could prompt an acceleration of investments by 2025 if the bill is finalized swiftly. This creates a narrow window for Bank of America to capitalize on these investments before the credits become less economically viable.
Betsy Graseck also considers the potential impact on Bank of America’s earnings per share (EPS), estimating a decline of approximately 3% over time if renewable energy investments are excluded. Despite this potential decline, the current market conditions and the bank’s strategic positioning suggest a favorable outlook, supporting the Buy rating. The analysis reflects a belief that Bank of America can effectively navigate the changing tax landscape to maintain its growth trajectory.

In another report released on June 12, KBW also maintained a Buy rating on the stock with a $52.00 price target.