It has been about a month since the last earnings report for Bank of America (BAC Quick QuoteBAC - Free Report) . Shares have added about 4.8% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Bank of America due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Bank of America Q3 Earnings Beat on Solid Trading & IB Performance

Bank of America’s third-quarter 2025 earnings of $1.06 per share handily surpassed the Zacks Consensus Estimate of 94 cents. The bottom line compared favorably with earnings of 81 cents in the prior-year quarter.

Behind Headline Numbers

Bank of America recorded an improvement in trading numbers for the 14th straight quarter. Sales and trading revenues, excluding net DVA, grew 8.3% year over year to $5.35 billion. Fixed-income trading fees increased 4.6%, while equity trading income rose 13.7%. We had projected sales and trading revenues (excluding net DVA) of $5.06 billion.

Unlike the previous quarter, the IB performance was robust this time. IB fees (in the Global Banking division) of $1.16 billion increased 47.5% year over year. Equity and debt underwriting income increased 47% and 42.2%, respectively. Advisory revenues grew 52.7%.

Improvement in trading and IB fees, along with higher net interest income, drove Bank of America’s total revenues. NII grew on a year-over-year basis on higher interest income related to Global Markets activity, fixed-rate asset repricing and higher deposit and loan balances, partially offset by the impact of lower interest rates.

While provisions declined in the quarter on a year-over-year basis, non-interest expenses increased, which hurt the results to some extent.

The company’s net income applicable to common shareholders grew 26% from the prior-year quarter to $8.04 billion. Our estimate for the metric was $6.85 billion.

Revenues Improve, Expenses Rise

Net revenues were $28.09 billion, which surpassed the Zacks Consensus Estimate of $27.28 billion. Also, the top line increased 10.8% from the prior-year quarter.

NII (fully taxable-equivalent basis) grew 9% year over year to $15.39 billion. Our estimate for NII was $15.29 billion. Net interest yield expanded 9 basis points to 2.01%. We expected the metric to be 1.99%.

Non-interest income increased 13% from the prior-year quarter to $12.86 billion. This was driven by higher total fees and commissions. We had projected non-interest income of $11.66 billion.

Non-interest expenses were $17.34 billion, up 5.2% year over year. The rise was due to an increase in almost all cost components, except for professional fees. Our estimate for non-interest expenses was $17.29 billion.

The efficiency ratio was 61.39%, down from 64.64% in the year-ago quarter. A fall in the efficiency ratio indicates an improvement in profitability.

Credit Quality Improves

Provision for credit losses was $1.30 billion, down 16% from the prior-year quarter. We estimated the metric to be $1.58 billion.

Net charge-offs declined 10.9% year over year to $1.37 billion. As of Sept. 30, 2025, non-performing loans and leases as a percentage of total loans were 0.46%, down from 0.53% in the prior-year period.

Capital Position Strong

Book value per share as of Sept. 30, 2025, was $37.95 compared with $35.37 a year ago. Tangible book value per share was $28.39, up from $26.25 a year ago.

At the end of September 2025, the common equity tier 1 capital ratio (advanced approach) was 13.1% compared with 13.5% as of Sept. 30, 2024.

Share Repurchase Update

In the reported quarter, the company repurchased shares worth $5.3 billion.

Guidance

Management expects NII (FTE basis) to be $15.6-$15.7 billion in fourth-quarter 2025, suggesting 8% year-over-year growth.

In 2026, the year-over-year rise in NII is expected to be 5-7%.

In the fourth quarter of this year, expenses are expected to be roughly in line with that reported in the third quarter.

In the near term, total net charge-offs are not expected to change much, given the steady consumer delinquency trends, stability of C&I and reductions in CRE exposures.

Over time, the efficiency ratio is expected in the low-60% range.

Investor Day Medium-Term Targets

Bank of America’s chairman and CEO, Brian Moynihan, provided various medium-term targets at the company’s investor day.

NII (FTE) is expected to grow seeing a CAGR of 5-7%, with loans growing 5% or more and deposits rising 4%. An operating leverage of 200-300 bps is expected. The efficiency ratio is anticipated to be 55-59%. With expected EPS growth of 12% in the medium term, the ROTCE is projected to be 16-18%.

The company also provided medium-term targets for its various business divisions.

In the Consumer Banking unit, Bank of America targets 75 million clients, $20 billion in annual net income, 40% efficiency ratio and 40% return on average allocated capital. It expects card loans to see a CAGR of 5%.

In the Global Wealth & Investment Management division, revenues are expected to grow almost twice as fast as expenses, generating positive operating leverage and margin expansion. The average allocated capital is expected to improve to 30%.

In Merrill Wealth Management, 4-5% of annual organic growth is expected. Annual fee-based client flows are targeted at $135-$150 billion, and the pre-tax margin is expected to increase 4-6 percentage points.

For the Private Bank, $1 trillion in client balances, $5.5 billion in annual revenues and a 500-bps improvement in the pre-tax margin are expected for the medium term.

Within the Global Banking division, a 30% local client share is expected in Business Banking, along with a loan and deposit CAGR of 5-6%.

In Global Commercial Banking, the medium-term targets include growth of 3 percentage points in market share, 50% new economy revenue rally to $1.7 billion, international revenue improvement of 80% to $2.2 billion, investment banking boosting fee share by 2-4 percentage points to 15-17% and a 2-percentage-point workplace benefits client penetration to 14%.

Global Corporate Banking and Global Investment Banking revenues are anticipated to witness mid-single-digit CAGR.

In the Global Markets unit, $27 billion in segment revenues, $8 billion in net income, 15% return on assets and a 40% pre-tax margin are expected.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

VGM Scores

At this time, Bank of America has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a score of D on the value side, putting it in the bottom 40% for value investors.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions looks promising. Notably, Bank of America has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Bank of America is part of the Zacks Financial - Investment Bank industry. Over the past month, Goldman Sachs (GS Quick QuoteGS - Free Report) , a stock from the same industry, has gained 6.3%. The company reported its results for the quarter ended September 2025 more than a month ago.

Goldman reported revenues of $15.18 billion in the last reported quarter, representing a year-over-year change of +19.6%. EPS of $12.25 for the same period compares with $8.40 a year ago.

Goldman is expected to post earnings of $11.65 per share for the current quarter, representing a year-over-year change of -2.5%. Over the last 30 days, the Zacks Consensus Estimate has changed +3.9%.

Goldman has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.