Bank of America (BAC) AI Stock Analysis

• Market Cap: $334.11B
• Dividend Yield: 2.3%
• Average Volume (3M): 36.69M
• Price to Earnings (P/E): 13.2
• Beta (1Y): 1.23
• Revenue Growth: 8.23%
• EPS Growth: 16.15%
• Country: US
• Employees: 213,000
• Sector: Financial
• Sector Strength: 81
• Industry: Banks - Diversified
• EPS (TTM): 0.90
• Shares Outstanding: 7,531,876,000
• 10 Day Avg. Volume: 32,148,195
• 30 Day Avg. Volume: 36,691,446
• PEG Ratio: 2.67
• Price to Book (P/B): 1.09
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 46.74
• Enterprise Value/Market Cap: 2.28
• Enterprise Value/Revenue: 1.81
• Enterprise Value/Gross Profit: 7.38
• Enterprise Value/Ebitda: 5.56
• 1Y Price Target: $49.26
• Price Target Upside: 11.00% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 21

• Rating: 73 Outperform
• Price Target: ―

Bank of America's stock reflects strong financial performance and positive earnings call sentiment, balanced with technical analysis showing some bearish indicators. The valuation is attractive, providing a modest growth outlook with income potential. Key strengths include robust earnings growth and solid strategic positioning, while challenges involve managing financial leverage and cash flow volatility.

Positive Factors

Asset Quality

Strong asset quality is evident, as Bank of America has consistently outperformed peers in the annual Fed stress test for the past five years, showing the lowest potential loan losses in a severe downturn.

Financial Performance

Bank of America's strength in traditional banking is supported by superior loan, deposit, and checking account growth, along with effective expense management.

Revenue Growth

Investment and brokerage fees surge, contributing to an 11% rise in earnings.

Negative Factors

Competition

Organic growth faces challenges due to increased competition in traditional banking and lagging share growth in capital markets and wealth.

Interest Margin

Bank of America is underearning, as indicated by a depressed Net Interest Margin compared to base and Blue Sky scenarios.

Macroeconomic Risks

Recessionary risks include potential impacts from higher than expected inflation and Fed rate cuts, which may lead to slower loan growth and higher delinquencies.

Bank of America Business Overview & Revenue Model

Company Description

Bank of America Corporation, through its subsidiaries, provides banking and financial products and services for individual consumers, small and middle-market businesses, institutional investors, large corporations, and governments worldwide. Its Consumer Banking segment offers traditional and money market savings accounts, certificates of deposit and IRAs, noninterest-and interest-bearing checking accounts, and investment accounts and products; and credit and debit cards, residential mortgages, and home equity loans, as well as direct and indirect loans, such as automotive, recreational vehicle, and consumer personal loans. The company's Global Wealth & Investment Management segment offers investment management, brokerage, banking, and trust and retirement products and services; and wealth management solutions, as well as customized solutions, including specialty asset management services. Its Global Banking segment provides lending products and services, including commercial loans, leases, commitment facilities, trade finance, and commercial real estate and asset-based lending; treasury solutions, such as treasury management, foreign exchange, and short-term investing options and merchant services; working capital management solutions; and debt and equity underwriting and distribution, and merger-related and other advisory services. The company's Global Markets segment offers market-making, financing, securities clearing, settlement, and custody services, as well as risk management products using interest rate, equity, credit, currency and commodity derivatives, foreign exchange, fixed-income, and mortgage-related products. As of December 31, 2021, it served approximately 67 million consumer and small business clients with approximately 4,200 retail financial centers; approximately 16,000 ATMs; and digital banking platforms with approximately 41 million active users. The company was founded in 1784 and is based in Charlotte, North Carolina.

How the Company Makes Money

Bank of America generates revenue through multiple streams. The primary sources include net interest income, which arises from the difference between the interest earned on loans and the interest paid on deposits, and non-interest income, which includes fees and commissions from banking services, wealth management, and investment banking. The company also benefits from trading activities and investment management fees. Strategic partnerships and collaborations with various financial and technology firms further enhance its service offerings and customer reach, contributing significantly to its earnings.

Bank of America Financial Statement Overview

Summary

Bank of America exhibits strong financial health with consistent revenue growth and profitability. The improved free cash flow in the TTM is a positive sign, although cash flow volatility remains a concern. The balance sheet reveals significant leverage, which could pose risks if not managed properly. Overall, the bank is on a solid trajectory but must address leverage and cash flow stability to sustain long-term growth.

Income Statement

Bank of America has demonstrated strong revenue growth with a TTM revenue increase from the previous year, indicating robust performance in its core banking operations. The net profit margin of 27.32% in the TTM is strong, reflecting efficient cost management and profitability. However, the declining EBITDA margin from 29.21% in 2023 to 22.64% in the TTM suggests potential cost pressures or changes in operating efficiency.

Balance Sheet

The balance sheet reflects a high debt-to-equity ratio, increasing from 2.04 in 2023 to 1.17 in the TTM, indicating significant leverage. Despite this, the equity ratio remains stable at around 8.95%, suggesting a balanced approach to capital structure. The return on equity is strong at 9.42% in the TTM, showcasing effective utilization of shareholder funds, but the increasing leverage poses potential risks.

Cash Flow

The TTM cash flow indicates a positive turnaround with a free cash flow of $6.73 billion, contrasting with negative figures in prior years. The operating cash flow to net income ratio is 0.24, reflecting moderate cash conversion efficiency. However, the fluctuations in cash flow highlight potential volatility in cash management and investment activities.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
123.06B	101.89B	98.58B	94.95B	89.11B	85.53B
	Gross Profit
103.44B	101.89B	98.58B	94.95B	89.11B	85.53B
	EBIT
31.59B	29.25B	28.34B	30.97B	33.98B	19.00B
	EBITDA
50.82B	29.25B	30.40B	32.95B	35.87B	20.84B
	Net Income Common Stockholders
27.85B	27.13B	26.52B	27.53B	31.98B	17.89B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
609.23B	885.86B	754.61B	638.85B	798.19B	728.84B
	Total Assets
3.35T	3.26T	3.18T	3.05T	3.17T	2.82T
	Total Debt
721.90B	658.43B	618.19B	498.55B	496.20B	452.58B
	Net Debt
448.32B	368.31B	276.77B	261.09B	140.83B	65.57B
	Total Liabilities
3.05T	2.97T	2.89T	2.78T	2.90T	2.55T
	Stockholders Equity
295.58B	295.56B	291.65B	273.20B	270.07B	272.92B
Cash Flow		Free Cash Flow
6.73B	-8.80B	44.98B	-6.33B	-7.19B	37.99B
	Operating Cash Flow
4.55B	-8.80B	44.98B	-6.33B	-7.19B	37.99B
	Investing Cash Flow
-19.37B	-90.69B	-35.39B	-2.53B	-313.29B	-177.66B
	Financing Cash Flow
-8.29B	60.37B	93.34B	-106.04B	291.65B	355.82B

Bank of America Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 44.38
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BAC, the sentiment is Positive. The current price of 44.38 is above the 20-day moving average (MA) of 43.91, above the 50-day MA of 40.95, and above the 200-day MA of 42.49, indicating a bullish trend. The MACD of 0.90 indicates Positive momentum. The RSI at 62.31 is Neutral, neither overbought nor oversold. The STOCH value of 81.36 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BAC.

Bank of America Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JPM	82 Outperform	$734.29B	12.86	17.25%	1.91%	12.48%	23.05%
HSBC	80 Outperform	$208.00B	11.01	10.83%	5.53%	-1.91%	-6.79%
WFC	76 Outperform	$246.18B	13.59	11.05%	2.12%	3.51%	16.51%
C	74 Outperform	$142.94B	12.09	6.30%	2.93%	2.97%	87.82%
BAC	73 Outperform	$334.11B	13.25	9.46%	2.30%	8.23%	16.15%
MUFG	65 Neutral	$156.52B	13.23	9.18%	1.71%	13.21%	-12.06%
Sector *	64 Neutral	$12.77B	9.77	7.59%	16985.66%	12.31%	-7.69%

Bank of America Corporate Events

Bank of America Shareholders Approve Equity Plan Changes

On April 22, 2025, Bank of America Corporation held its Annual Meeting of Shareholders, where several key decisions were made. Shareholders approved the amendment and restatement of the Bank of America Corporation Equity Plan, which includes increasing the shares available for grant by 100 million, capping the value of shares granted to non-employee directors, and extending the plan’s expiration date to 2035. These changes are expected to support the company’s compensation strategy and maintain its competitive positioning in the industry.

Bank of America Reports Strong Q1 2025 Earnings

Bank of America reported a strong financial performance for the first quarter of 2025, with a net income of $7.4 billion and earnings per share of $0.90, reflecting an increase from the previous year. The company saw a 6% rise in revenue to $27.4 billion, driven by growth in net interest income and fee income across all segments. The bank’s balance sheet remained robust with approximately $2 trillion in deposits, and it returned $6.5 billion to shareholders. Despite potential economic changes, Bank of America remains confident in its strategic investments and diverse business model to continue delivering value to its clients and shareholders.