Bank of America (BAC): Assessing Valuation After Its 22% Year‑to‑Date Share Price Gain

Bank of America (BAC) has quietly outperformed many peers over the past year, and with shares up roughly 22% year to date, investors are asking whether this run still has room to go.

See our latest analysis for Bank of America.

That strong year to date share price return has built on a solid backdrop, with Bank of America benefiting from resilient US credit trends and improving rate expectations, while its five year total shareholder return above 100% suggests that momentum is still on its side.

If Bank of America’s climb has you thinking about what else could surprise to the upside, it is worth exploring fast growing stocks with high insider ownership as a next stop for ideas.

With earnings still growing and the share price edging toward analyst targets, investors now face a key question: is Bank of America still trading below its true value, or is the market already pricing in future growth?

Most Popular Narrative: 8.2% Undervalued

With Bank of America last closing at $54.09 against a narrative fair value near $58.90, the current share price leaves a modest valuation gap that hinges on how earnings, margins, and capital deployment evolve over the next few years.

The analysts have a consensus price target of $53.521 for Bank of America based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $59.0, and the most bearish reporting a price target of just $46.0.

Read the complete narrative.

Curious what kind of steady revenue climb, gently shifting margins, and future earnings multiple are baked into that fair value gap? The full narrative unpacks a multi year roadmap of growth assumptions, capital returns, and profitability targets that could quietly reset expectations for where this stock belongs.

Result: Fair Value of $58.90 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, stubborn inflation or a sharper economic slowdown could pressure credit quality and deposit costs, which could undermine the upbeat earnings and valuation assumptions baked into today’s targets.

Find out about the key risks to this Bank of America narrative.

Another Angle on Valuation

While our fair value narrative suggests Bank of America is modestly undervalued, its 14x price to earnings ratio sits above both peers at 13.7x and the wider US banks sector at 11.6x. That richer tag narrows the margin of safety and leaves less room if sentiment turns.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Bank of America Narrative

If you see things differently or want to dig into the numbers yourself, you can build a custom narrative in just a few minutes. Do it your way.

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding Bank of America.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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