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Bank of America (BAC)
NYSE:BAC
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Bank of America
(NYSE:BAC)72Outperform
Positive Factors
Earnings
Sales and trading, investment banking fees, and asset management fees lifted earnings.
Financial Performance
NII rose 3% YoY from fixed-rate asset repricing and higher Global Markets activity, compounded by loan growth of 3% YoY.
Negative Factors
Regulatory Issues
The OCC issued a consent order against Bank of America for Bank Secrecy Act violations, indicating a breakdown in policies and procedures to report suspicious activity.
Bank of America (BAC) vs. S&P 500 (SPY)
Market Cap
$324.49B
Dividend Yield2.19%
Average Volume (3M)36.10M
Price to Earnings (P/E)13.3
Beta (1Y)1.14
Revenue Growth13.06%
EPS Growth4.94%
CountryUS
Employees213,000
SectorFinancial
Sector Strength93
IndustryBanking
Share Statistics
EPS (TTM)3.21
Shares Outstanding7,604,677,200
10 Day Avg. Volume44,319,697
30 Day Avg. Volume36,101,867
Financial Highlights & Ratios
PEG Ratio2.69
Price to Book (P/B)N/A
Price to Sales (P/S)3.40
Price to Cash Flow (P/CF)3.30
P/FCF Ratio2.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$53.03Price Target Upside24.28% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering19
Bank of America Business Overview & Revenue Model
Company DescriptionBank of America Corporation (BAC) is a multinational financial services company headquartered in Charlotte, North Carolina. It operates in several sectors including consumer banking, wealth management, and investment banking. The company offers a wide range of financial products and services such as checking and savings accounts, credit cards, mortgage loans, auto loans, and investment management solutions to individuals, small businesses, and large corporations.
How the Company Makes MoneyBank of America makes money through various revenue streams. The primary sources of revenue include interest income from loans and credit products, and non-interest income from fees and commissions. Interest income is generated by the difference between the interest charged on loans and mortgages and the interest paid on deposits and other borrowings. Non-interest income comes from service fees on deposit accounts, fees from credit and debit card transactions, investment banking services, wealth management and advisory fees, and trading revenues. The company also benefits from strategic partnerships and collaborations that enhance its product offerings and market reach.
Bank of America Financial Statement Overview
Summary
Bank of America exhibits moderate financial health with stable revenue growth and profitability in recent years. However, increasing leverage and fluctuating cash flows raise concerns over financial stability and liquidity. While profitability metrics are generally positive, efficiency improvements and more consistent cash flow management are needed to enhance overall financial performance.Income Statement
Bank of America's revenue has shown a moderate growth trend over the last several years, with total revenue increasing from $74.2 billion in 2020 to $192.4 billion in 2024. However, the EBIT margin declined from 43.7% in 2021 to 15.2% in 2024, indicating potential efficiency issues. The net profit margin experienced fluctuation, with a decrease from 34.1% in 2021 to 14.1% in 2024. This suggests a need for improved cost management or revenue diversification.72
Positive
Balance Sheet
The debt-to-equity ratio has increased significantly from 1.06 in 2020 to 2.23 in 2024, indicating a higher financial leverage. The equity ratio slightly decreased from 9.7% in 2021 to 9.1% in 2024, suggesting reduced equity financing relative to assets. Return on equity has remained relatively stable, peaking at 11.8% in 2021 before slightly declining to 9.2% in 2024. This indicates consistent profitability, albeit under increased leverage risk.65
Positive
Cash Flow
The operating cash flow fluctuated significantly, with a negative cash flow in 2021 followed by a recovery to $44.98 billion in 2023. However, free cash flow has not shown a consistent growth trend, remaining volatile. The free cash flow to net income ratio has varied, indicating irregular conversion of earnings to cash. This inconsistency in cash flow generation could pose liquidity risks if it persists.58
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 101.89B | 98.58B | 92.41B | 93.71B | 74.21B | Gross Profit |
| 101.89B | 98.58B | 0.00 | 0.00 | 0.00 | EBIT |
| 29.25B | 28.34B | 38.64B | 40.95B | 25.73B | EBITDA |
| 29.25B | 30.40B | 38.64B | 40.95B | 25.73B | Net Income Common Stockholders |
| 27.13B | 26.52B | 27.53B | 31.98B | 17.89B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 885.86B | 754.61B | 458.25B | 654.54B | 621.50B | Total Assets |
| 3.26T | 3.18T | 3.05T | 3.17T | 2.82T | Total Debt |
| 658.43B | 618.19B | 302.91B | 303.87B | 282.25B | Net Debt |
| 368.31B | 276.77B | 65.45B | -51.49B | -104.75B | Total Liabilities |
| 2.97T | 2.89T | 2.78T | 2.90T | 2.55T | Stockholders Equity |
| 295.56B | 291.65B | 273.20B | 270.07B | 272.92B |
| Cash Flow | Free Cash Flow | |||
| 0.00 | 44.98B | -6.33B | -7.19B | 37.99B | Operating Cash Flow |
| 0.00 | 44.98B | -6.33B | -7.19B | 37.99B | Investing Cash Flow |
| 0.00 | -35.39B | -2.53B | -313.29B | -177.66B | Financing Cash Flow |
| 0.00 | 93.34B | -106.04B | 291.65B | 355.82B |
Bank of America Technical Analysis
Negative
42.67
Price Trends
45.59
Negative
44.91
Negative
42.16
Positive
Market Momentum
-0.53
Positive
34.19
Neutral
52.51
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BAC, the sentiment is Negative. The current price of 42.67 is below the 20-day moving average (MA) of 45.77, below the 50-day MA of 45.59, and above the 200-day MA of 42.16, indicating a neutral trend. The MACD of -0.53 indicates Positive momentum. The RSI at 34.19 is Neutral, neither overbought nor oversold. The STOCH value of 52.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BAC.
Bank of America Risk Analysis
Bank of America disclosed 30 risk factors in its most recent earnings report. Bank of America reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Bank of America Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $699.73B | 12.67 | 16.96% | 1.84% | 17.07% | 21.78% | |
77 Outperform | $196.32B | 15.32 | 12.79% | 2.81% | 9.17% | 53.77% | |
74 Outperform | $241.02B | 13.66 | 11.01% | 2.01% | 7.87% | 11.69% | |
74 Outperform | $181.34B | 14.33 | 11.70% | 1.94% | 14.80% | 77.97% | |
73 Outperform | $136.34B | 12.17 | 6.08% | 2.86% | 8.20% | 49.26% | |
72 Outperform | $324.49B | 13.28 | 9.18% | 2.19% | 13.06% | 4.94% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% |
* Financial Sector Average
Performance Comparison
BAC
Bank of America
42.67
7.89
22.69%
C
Citigroup
72.35
16.97
30.64%
JPM
JPMorgan Chase & Co.
250.25
64.96
35.06%
MS
Morgan Stanley
121.72
38.81
46.81%
WFC
Wells Fargo
73.30
17.55
31.48%
GS
Goldman Sachs Group
581.14
199.98
52.47%
Bank of America Earnings Call Summary
Earnings Call Date: Jan 16, 2025 | % Change Since: -9.41% | Next Earnings Date: Apr 15, 2025
Earnings Call Sentiment Positive
The earnings call for Bank of America Q4 2024 was predominantly positive, highlighting strong revenue growth, record sales and trading performance, and consistent deposit and loan growth. However, there were some challenges, such as increased expenses and regulatory compliance issues. Overall, the company is positioned well for growth in 2025.Highlights
Strong Revenue Growth
Bank of America reported $25.5 billion in revenue for Q4 2024, up 15% year-over-year. Excluding a one-time charge, revenue grew by 8%.
Record Sales and Trading Revenue
Sales and trading revenue reached a fourth-quarter record of $4.1 billion, marking 11 consecutive quarters of year-over-year growth.
Positive Deposit and Loan Growth
Deposits grew for the sixth consecutive quarter, with consumer banking deposits increasing by $4 billion from the third quarter. Loans also showed growth, with commercial loans up 5% year-over-year.
Improving Net Interest Income (NII)
NII increased for the second consecutive quarter, with a Q4 total of $14.5 billion, up from a trough of $13.9 billion in Q2 2024. The bank expects NII to grow 6-7% in 2025.
Wealth Management Success
Wealth Management added 24,000 new households in 2024, with total client balances reaching $6 trillion. Asset management fees grew by 23% year-over-year.
Lowlights
Expense Increase
Noninterest expense rose to $16.8 billion, driven by incentives tied to revenue growth and investments in people, technology, and brand partnerships.
Regulatory Challenges
The OCC issued a compliance consent order related to enhancing certain deficiencies, leading to increased compliance costs.
Commercial Real Estate Loan Decline
Commercial real estate loans decreased by 8% year-over-year, reflecting challenges in this sector.
Company Guidance
During Bank of America's Q4 2024 earnings call, the executives provided a comprehensive overview of the company's financial performance and outlook. The bank reported a net income of $6.7 billion, equating to $0.82 in earnings per share (EPS) for the quarter, contributing to a full-year net income of $27.1 billion and an EPS of $3.21. Revenue for the year reached $102 billion, with a return on assets of 83 basis points and a 13% return on tangible common equity. The balance sheet remained robust, ending the year with $953 billion in liquidity and $201 billion in regulatory CET1 capital, resulting in a CET1 ratio of 11.9%. The bank observed growth in net interest income (NII), which increased to $14.5 billion for the quarter on a fully taxable equivalent basis, with expectations to achieve record NII in 2025. Deposit growth continued for the sixth consecutive quarter, while loan demand showed a positive trend. Investment banking fees surged by 44% year-over-year, and sales and trading revenue set a new record, contributing to a full-year total of nearly $19 billion. The call highlighted the bank's continued focus on responsible growth, digital engagement, and capital returns to shareholders, with $21 billion returned in 2024, including an 8% dividend increase.Bank of America Corporate Events
Executive/Board Changes
Bank of America Appoints New Chief Accounting Officer
Neutral
Feb 28, 2025
Bank of America Corporation announced that effective March 1, 2025, Rudolf A. Bless will step down as Chief Accounting Officer, with Johnbull Okpara taking over the role. Mr. Okpara, who joined the company in November 2024, previously held significant positions at Citigroup Inc. and Morgan Stanley. His appointment is expected to bring extensive experience to the role, potentially impacting the company’s financial operations and strategic planning.
Executive/Board Changes
Bank of America Appoints Maria Martinez to Board
Positive
Jan 29, 2025
On January 29, 2025, Bank of America appointed Maria N. Martinez to its Board of Directors, where she will also serve on the Corporate Governance, ESG, and Sustainability Committee and the Enterprise Risk Committee. Martinez brings over four decades of experience from the technology and telecommunications industries, having held leadership positions at Cisco Systems, Salesforce, Microsoft, and others. Her extensive experience in technology is expected to provide valuable insights and strengthen the board’s perspective, contributing significantly to the company’s governance and strategic direction.
Business Operations and StrategyFinancial Disclosures
Bank of America Reports Strong Q4 2024 Performance
Positive
Jan 16, 2025
In its report for the fourth quarter and full year of 2024, Bank of America announced a robust financial performance with net income reaching $6.7 billion and earnings per share at $0.82 for the fourth quarter. The company reported a total revenue of $25.3 billion for the quarter, up 15% from the previous year, driven by increased asset management, investment banking fees, and sales and trading revenue. The company also highlighted a strong liquidity and capital position, enabling it to return $21 billion to shareholders over the year, positioning itself favorably for 2025.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.