Bank of America (BAC) delivered strong fourth-quarter results on Thursday, exceeding expectations for both profit and revenue, driven by robust investment banking activity and higher interest income. The bank reported earnings of $0.82 per share in the fourth quarter, surpassing analysts’ estimates of $0.77 per share.
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What Drove BAC’s Rise in Revenues in Q4?
Furthermore, the bank’s revenue climbed 15% year-over-year to $25.5 billion, beating Street estimates of $25.12 billion. Similar to other banking giants, BAC’s investment banking fees surged 44% to $1.65 billion, around $180 million above expectations, reflecting a strong finish to the year. Notably, BAC’s CEO Brian Moynihan had forecasted a 25% rise in these fees, but the results far exceeded that projection, signaling strong momentum in the business.
However, the bank’s trading operations did not significantly outperform as they did for rivals like Goldman Sachs (GS). The bank’s fixed income revenue rose 19% to $2.5 billion, while equities revenue increased 7% to $1.6 billion.
A key driver of the bank’s success in the fourth quarter was net interest income, which grew 3% to $14.5 billion, exceeding estimates by $170 million. Bank of America’s reliance on interest rates to boost this metric place a spotlight on its 2025 targets, particularly as expectations for rate cuts diminish.
Is BAC a Good Buy Right Now?
Analysts remain bullish about BAC stock, with a Strong Buy consensus rating based on 17 Buys and two Holds. Over the past year, BAC has increased by more than 45%, and the average BAC price target of $52.26 implies an upside potential of 11.1% from current levels. These analyst ratings are likely to change following BAC’s results today.
