We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
BAC's Investor Day Preview: Focus on Growth Strategy, Lagging Returns
Read MoreHide Full Article
Key Takeaways
Bank of America will host its first Investor Day since 2011 to outline growth and performance plans.
Management plans to boost loan growth, digital banking and wealth and investment banking operations.
BAC expects 6-7% annual NII growth in 2025-2026 and aims to lift return on tangible equity above 15%.
Tomorrow, Bank of America (BAC - Free Report) , the second-largest U.S. bank, will host its first Investor Day since 2011. The event will feature presentations from CEO Brian Moynihan and other top executives, who are expected to outline strategic priorities, growth opportunities and performance across major business segments.
Management is likely to address investor concerns over BAC’s underperformance versus peers, such as JPMorgan (JPM - Free Report) , Wells Fargo (WFC - Free Report) and Citigroup (C - Free Report) . Over the past five years, BAC shares have lagged these competitors.
5-Year Price Performance
Image Source: Zacks Investment Research
Executives are expected to provide details on plans to accelerate loan growth, expand digital banking and strengthen wealth management and investment banking (IB) operations. Bank of America is likely to set a target for Return on Tangible Common Equity, with the aim of lifting it above the current 15% level over the medium term.
Further, discussions will likely include the impact of prior investments in long-dated Treasuries that have weighed on earnings since the Federal Reserve began raising rates in 2022. However, management anticipates sustained net interest income (NII) growth of 6-7% annually for 2025-2026, supported by improving loan demand and deposit stability amid declining interest rates.
Additionally, BAC is expected to outline initiatives to boost fee-based revenues and narrow competitive gaps in IB and wealth management businesses. At present, these divisions at JPMorgan, Wells Fargo and Citigroup are performing well, thus supporting the top-line growth.
Overall, the event should offer clearer insight into Bank of America’s roadmap for improving profitability, efficiency and shareholder return.
Bank of America’s Valuation Analysis & Estimates
From a valuation standpoint, Bank of America trades at a 12-month trailing price-to-tangible book (P/TB) of 1.93X, below the industry’s 3.21X. Further, the stock is trading at a discount compared with JPMorgan’s 3.11X and Wells Fargo’s 2.09X. On the other hand, it is expensive compared with Citigroup’s 1.10X.
P/TB Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Bank of America’s 2025 and 2026 earnings implies year-over-year growth of 14.9% and 14.5%, respectively. In the past month, earnings estimates for 2025 and 2026 have increased to $3.77 and $4.31, respectively.
Image: Bigstock
BAC's Investor Day Preview: Focus on Growth Strategy, Lagging Returns
Key Takeaways
Tomorrow, Bank of America (BAC - Free Report) , the second-largest U.S. bank, will host its first Investor Day since 2011. The event will feature presentations from CEO Brian Moynihan and other top executives, who are expected to outline strategic priorities, growth opportunities and performance across major business segments.
Management is likely to address investor concerns over BAC’s underperformance versus peers, such as JPMorgan (JPM - Free Report) , Wells Fargo (WFC - Free Report) and Citigroup (C - Free Report) . Over the past five years, BAC shares have lagged these competitors.
5-Year Price Performance
Image Source: Zacks Investment Research
Executives are expected to provide details on plans to accelerate loan growth, expand digital banking and strengthen wealth management and investment banking (IB) operations. Bank of America is likely to set a target for Return on Tangible Common Equity, with the aim of lifting it above the current 15% level over the medium term.
Further, discussions will likely include the impact of prior investments in long-dated Treasuries that have weighed on earnings since the Federal Reserve began raising rates in 2022. However, management anticipates sustained net interest income (NII) growth of 6-7% annually for 2025-2026, supported by improving loan demand and deposit stability amid declining interest rates.
Additionally, BAC is expected to outline initiatives to boost fee-based revenues and narrow competitive gaps in IB and wealth management businesses. At present, these divisions at JPMorgan, Wells Fargo and Citigroup are performing well, thus supporting the top-line growth.
Overall, the event should offer clearer insight into Bank of America’s roadmap for improving profitability, efficiency and shareholder return.
Bank of America’s Valuation Analysis & Estimates
From a valuation standpoint, Bank of America trades at a 12-month trailing price-to-tangible book (P/TB) of 1.93X, below the industry’s 3.21X. Further, the stock is trading at a discount compared with JPMorgan’s 3.11X and Wells Fargo’s 2.09X. On the other hand, it is expensive compared with Citigroup’s 1.10X.
P/TB Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Bank of America’s 2025 and 2026 earnings implies year-over-year growth of 14.9% and 14.5%, respectively. In the past month, earnings estimates for 2025 and 2026 have increased to $3.77 and $4.31, respectively.
Earnings Estimates Trend
Image Source: Zacks Investment Research
Bank of America currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.