Bank of America Corporation Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

It's been a good week for Bank of America Corporation (NYSE:BAC) shareholders, because the company has just released its latest quarterly results, and the shares gained 7.1% to US$42.80. The result was positive overall - although revenues of US$25b were in line with what the analysts predicted, Bank of America surprised by delivering a statutory profit of US$0.81 per share, modestly greater than expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Bank of America

Taking into account the latest results, the current consensus from Bank of America's 16 analysts is for revenues of US$106.2b in 2025. This would reflect a meaningful 12% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to leap 27% to US$3.61. In the lead-up to this report, the analysts had been modelling revenues of US$105.9b and earnings per share (EPS) of US$3.59 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The analysts reconfirmed their price target of US$45.79, showing that the business is executing well and in line with expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Bank of America at US$53.00 per share, while the most bearish prices it at US$39.50. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Bank of America is an easy business to forecast or the the analysts are all using similar assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Bank of America's past performance and to peers in the same industry. The analysts are definitely expecting Bank of America's growth to accelerate, with the forecast 9.7% annualised growth to the end of 2025 ranking favourably alongside historical growth of 4.2% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.5% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Bank of America is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Bank of America going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Bank of America has 1 warning sign we think you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.