Bank of America Shares Climb 23.1% YTD: Is It Too Late to Buy?

Core Insights - Bank of America (BAC) is expected to achieve another year of double-digit gains, building on a strong 30.5% rally in 2024, with a year-to-date stock increase of 23.1% [2][8] - The bank's fundamentals and macroeconomic conditions will influence future stock performance, with interest rate cuts and loan demand being key factors [5][6] Financial Performance - BAC's net interest income (NII) is projected to grow by 5-7% year-over-year for 2026, supported by loan growth and easing capital requirements [8][31] - The bank plans to repurchase $4.5 billion in shares quarterly under a new $40 billion buyback plan and has increased its dividend by 8% [8][17] Market Position and Strategy - BAC operates 3,650 financial centers and is expanding its footprint, having opened 300 new centers since 2019, which has added $18 billion in incremental deposits [10][11] - The bank aims for a mid-single-digit compound annual growth rate (CAGR) in investment banking fees and plans to deepen integration between corporate and investment banking [19][22] Asset Quality and Risk Management - Asset quality has been weakening, with provisions increasing significantly over the past few years, indicating a cautious outlook on credit profiles due to high interest rates [20][21] - The bank maintains a solid liquidity profile, with average global liquidity sources totaling $961 billion as of September 30, 2025 [14] Earnings Estimates and Valuation - The Zacks Consensus Estimate for BAC's earnings per share is projected at $3.80 for 2025 and $4.35 for 2026, indicating growth rates of 15.9% and 14.5%, respectively [25][26] - BAC's stock is trading at a price-to-tangible book (P/TB) ratio of 1.98X, below the industry average of 3.07X, suggesting it is undervalued compared to peers [30][31]