On Friday, Truist Securities updated its financial model for Bank of America (NYSE:BAC), resulting in a slight increase in the price target for the bank's shares. The target has been adjusted to $53.00, up from the previous $52.00, while the firm maintained a Buy rating on the stock. Currently trading at $46.45 and near its 52-week high of $48.08, Bank of America has demonstrated strong momentum with a 50.4% return over the past year. According to InvestingPro analysis, the stock appears undervalued based on its comprehensive Fair Value model.
The adjustment follows the fourth quarter of 2024 results and the management's outlook for 2025. In light of these factors, Truist Securities has made minor revisions to its earnings per share (EPS) estimates for Bank of America. For the year 2025, the firm has reduced its EPS estimate by 1% to $3.60, a decrease of $0.05. This new estimate takes into account an expected increase in net interest income, which is counterbalanced by higher projected expenses and a higher tax rate. The revised estimate also assumes approximately 260 basis points of positive operating leverage, with revenue growth around 5% and expenses increasing by approximately 2.5%.
Looking ahead to 2026, Truist Securities has increased its EPS estimate by 1% to $4.40, an increase of $0.05. This adjustment is based on the carryover of a higher net interest income exit rate at the end of the fourth quarter of 2025, although it is partially offset by anticipated increases in expenses and the tax rate. For 2026, the firm forecasts an expansion of positive operating leverage to around 370 basis points.
The analysis also includes expectations for Bank of America's share buyback program. Truist Securities projects that total share buybacks will grow from approximately $14 billion in 2024 to $17 billion in the estimated 2025 and further to $24 billion in the estimated 2026. Additionally, the firm anticipates that the Common Equity Tier 1 (CET-1) capital ratio will remain elevated compared to management's target, reaching 12.0% by the end of 2026.
As a prominent player in the banking industry with a market capitalization of $353.75 billion, Bank of America has maintained dividend payments for 54 consecutive years, demonstrating strong financial stability. InvestingPro subscribers can access detailed financial health metrics and 10+ additional ProTips about BAC's performance.
The new price target of $53 reflects roughly 12 times Truist Securities' revised 2026 EPS estimate of $4.40 for Bank of America. This valuation represents the firm's current outlook on the bank's financial performance over the next few years. Trading at a P/E ratio of 14.33x, the stock's valuation metrics and comprehensive analysis are available in the detailed Pro Research Report on InvestingPro, which provides expert insights and actionable intelligence for informed investment decisions.
In other recent news, Bank of America reported stronger-than-expected fourth-quarter earnings for 2024, delivering earnings per share (EPS) of $0.82, surpassing both Oppenheimer's and the consensus estimate of $0.77. Piper Sandler adjusted its price target for the bank's stock down to $49.00, while maintaining a Neutral stance. In contrast, Oppenheimer increased the price target to $55.00, maintaining an Outperform rating. Truist Securities began coverage on the bank's stock, assigning a Buy rating and setting a price target of $52.00.
UBS analyst Erika Najarian upgraded Bank of America stock from Neutral to Buy, setting a new price target of $53.00, citing potential benefits from regulatory easing related to the Basel 3 framework and strategic stock buybacks. Evercore ISI, despite cutting Bank of America's target to $51, maintained an Outperform rating, projecting the bank's net interest income to grow by 6-7% in 2025, surpassing the consensus estimate of around 5%.
However, the bank has also faced regulatory challenges, with the Office of the Comptroller of the Currency issuing a cease and desist order due to deficiencies in its anti-money laundering measures. Bank of America is actively addressing these issues, working closely with the OCC to enhance its systems.
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