On Monday, Evercore ISI maintained its Outperform rating on Bank of America (NYSE:BAC) with a steady price target of $46.00.
The firm's analysis of the bank's net interest income (NII) prospects for 2025 suggests that while Bank of America and other banks benefited from rising interest rates, with Bank of America seeing a less pronounced increase, there is potential for continued NII growth into 2025, albeit at a lower rate than the consensus forecast.
The firm anticipates that Bank of America will experience a 3.4% growth in NII in 2025, which is less than the consensus estimate of 5.4%. The projected NII for the fourth quarter of 2025 is approximately $14.9 billion, compared to the consensus estimate of $15.4 billion.
"Still, we think BofA has growth where others might not, and has made organic investments that will help their ˜25/™26 trajectory look even better," said the analsyts.
In other recent news, David Dowd was appointed as the new president of Bank of America's Asheville market, a move that aligns with the company's focus on enhancing local community engagement and economic mobility.
Deutsche Bank upgraded Bank of America's stock from Hold to Buy, citing potential for revenue growth, while Piper Sandler maintained a neutral rating. These evaluations came amidst concerns over potential additional sell-offs by Berkshire Hathaway (NYSE:BRKa), which continues to reduce its stake in the bank, generating approximately $7 billion since mid-July.
InvestingPro Insights
To complement Evercore ISI's analysis, InvestingPro data offers additional insights into Bank of America's financial position. The bank's market capitalization stands at $305.73 billion, reflecting its significant presence in the financial sector. Bank of America's P/E ratio of 13.78 suggests that its stock is reasonably valued compared to its earnings, which aligns with the Outperform rating from Evercore ISI.
InvestingPro Tips highlight that Bank of America has raised its dividend for 10 consecutive years, demonstrating a commitment to shareholder returns. This is particularly relevant given the firm's projected NII growth, as it suggests the bank may have the financial stability to maintain or potentially increase dividends in the future.
Another InvestingPro Tip notes that Bank of America is a prominent player in the Banks industry, which supports Evercore ISI's view on the bank's potential for continued growth and market outperformance. The bank's dividend yield of 2.64% and dividend growth of 18.18% in the last twelve months further underscore its appeal to income-focused investors.
For readers interested in a more comprehensive analysis, InvestingPro offers additional tips and insights that could provide a deeper understanding of Bank of America's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.