Bank of America (BAC) AI Stock Analysis

• Market Cap: $354.90B
• Dividend Yield: 2.21%
• Average Volume (3M): 37.53M
• Price to Earnings (P/E): 14.1
• Beta (1Y): 1.23
• Revenue Growth: 8.23%
• EPS Growth: 16.15%
• Country: US
• Employees: 213,000
• Sector: Financial
• Sector Strength: 78
• Industry: Banks - Diversified
• EPS (TTM): 0.90
• Shares Outstanding: 7,531,876,000
• 10 Day Avg. Volume: 39,890,507
• 30 Day Avg. Volume: 37,525,142
• PEG Ratio: 2.91
• Price to Book (P/B): 1.18
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 75.32
• Enterprise Value/Market Cap: 2.21
• Enterprise Value/Revenue: 1.03
• Enterprise Value/Gross Profit: 8.04
• Enterprise Value/Ebitda: 6.56
• 1Y Price Target: $49.93
• Price Target Upside: 5.96% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 21

• Rating: 81 Outperform
• Price Target: $52.00 ▲(10.36%Upside)

Bank of America's strong earnings performance, effective digital engagement, and robust market momentum contribute significantly to its score. While the valuation is reasonable, potential risks from high leverage and economic uncertainties are notable concerns.

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.

Earnings Growth

Valuation is on the lower end of the past decade range, suggesting potential for stock price growth due to strong earnings growth forecasts.

Investment Strategy

The CEO reinforced BAC's investing for growth, highlighting improving top-line and bottom line, especially since much of NII growth is profit.

Negative Factors

Net Interest Income Challenges

Expect BAC to come in at bottom-end of that range, as timing of rate cuts may derail ability to grow NII sequentially with BAC’s asset-sensitive balance sheet facing initial headwinds from lower rates before catch-up on lagged deposit repricing.

Recessionary 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.

Tax Credit Reduction

The House tax bill phases-out renewable energy investment and production tax credits, which if implemented as written would likely make incremental new renewable energy equity investments at BAC uneconomical.

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 demonstrates strong financial health with consistent revenue growth and profitability. The improved free cash flow is a positive sign, though cash flow volatility and high leverage pose potential risks. Overall, the bank is on a solid trajectory but must address leverage and cash flow stability for sustained 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	191.35B	192.43B	171.91B	115.05B	93.85B	93.75B
Gross Profit	97.45B	96.07B	94.19B	92.41B	93.71B	74.21B
EBITDA	32.32B	31.44B	30.40B	32.95B	35.87B	20.84B
Net Income	27.85B	27.13B	26.52B	27.53B	31.98B	17.89B
Balance Sheet
Total Assets	3.35T	3.26T	3.18T	3.05T	3.17T	2.82T
Cash, Cash Equivalents and Short-Term Investments	657.11B	642.92B	608.07B	458.25B	654.54B	621.50B
Total Debt	721.69B	658.43B	618.19B	498.55B	496.20B	452.58B
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	4.55B	-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	-108.38B	-90.69B	-35.39B	-2.53B	-313.29B	-177.66B
Financing Cash Flow	64.54B	60.37B	93.34B	-106.04B	291.65B	355.82B

Bank of America Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 47.12
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• 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 47.12 is above the 20-day moving average (MA) of 45.11, above the 50-day MA of 42.87, and above the 200-day MA of 42.74, indicating a bullish trend. The MACD of 1.08 indicates Negative momentum. The RSI at 71.41 is Negative, neither overbought nor oversold. The STOCH value of 90.69 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
BAC	81 Outperform	$354.90B	14.07	9.46%	2.21%	8.23%	16.15%
HSBC	80 Outperform	$212.07B	11.24	10.83%	3.25%	-1.91%	-6.79%
JPM	78 Outperform	$797.91B	14.09	17.25%	1.95%	12.41%	23.05%
C	76 Outperform	$157.60B	13.33	6.30%	2.65%	2.97%	87.82%
MUFG	76 Outperform	$155.19B	13.23	9.18%	1.93%	5.39%	20.82%
WFC	76 Outperform	$258.71B	14.28	11.05%	2.01%	3.51%	16.51%
Sector *	67 Neutral	$16.66B	11.44	9.71%	3.91%	11.61%	-10.70%

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.