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BAC Slips 6.5% So Far This Year: Should You Still Buy the Stock?
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Key Takeaways
BAC's revenue growth has been driven by rising loans, NII and fee income over recent years.
Bank of America's IB fees climbed in 2024, 2025 and first-quarter 2026 amid stronger dealmaking.
BAC plans 150 new centers by 2027 while expanding AI tools to boost efficiency and engagement.
Despite impressive first-quarter 2026 results, supported primarily by loan growth along with trading and investment banking (IB) strength, shares of Bank of America (BAC - Free Report) have lost 6.5% so far this year. Rather than weak fundamentals, macro and sector-wide concerns have been the reason for the price decline.
Fears of a softer U.S. economy, uneven loan demand, persistent inflation, global trade tensions, geopolitical uncertainty and concerns around commercial real estate exposure have been some major concerns that have hurt the banking sector this year.
Year to date, the S&P 500 Index has rallied 9.2%, and the industry to which BAC stock belongs has declined 3%.
If we look at BAC’s two key peers, JPMorgan (JPM - Free Report) and Morgan Stanley (MS - Free Report) , it appears that BAC has underperformed both. Shares of JPMorgan have lost 5.9% so far this year, whereas the Morgan Stanley stock has gained 12.9%.
YTD Price Performance
Image Source: Zacks Investment Research
Now, the question arises whether you should add BAC stock to your portfolio now despite its price decline. In order to understand this, let us dig deeper into the company’s fundamental strength and growth prospects.
Factors Supporting Bank of America Stock
Robust Top-Line Growth: Bank of America has been witnessing an increase in revenues over the past several years. Total net revenues witnessed a compound annual growth rate (CAGR) of 5.7% over the last five years (2020-2025), with the uptrend continuing in the first quarter of 2026.
Revenue Trend
Image Source: Zacks Investment Research
The rise has been driven by consistent loan growth (net loans and leases saw a CAGR of 5.2% over the same time frame) and a favorable interest rate backdrop, along with a decent rise in fee income (total non-interest income witnessed a CAGR of 4.7%).
Despite declines in interest rates in 2024 and 2025, the company’s net interest income (NII) witnessed a CAGR of 6.7% in the five years ended 2025, primarily supported by increasing loan balances. The uptrend for NII continued in the first three months of 2026.
On the expectation of a continued rise in loan balances, along with stabilizing funding costs and fixed-rate asset repricing, BAC’s NII is expected to continue to improve in the near term. This, coupled with fee income growth, will likely keep supporting revenue growth.
The Zacks Consensus Estimate for BAC’s 2026 and 2027 revenues is pegged at $120.81 billion and $126.92 billion, which indicates year-over-year growth rates of 9.6% and 5.1%, respectively.
Revenue Growth Estimates
Image Source: Zacks Investment Research
Solid Investment Banking (IB) Business: BAC’s IB business performance has been impressive of late. When global deal-making came to a grinding halt at the beginning of 2022, it weighed heavily on Bank of America’s IB business. The company’s total IB fees (in the Global Banking division) declined 45.7% in 2022 and 2.4% in 2023.
However, the trend reversed thereafter. In 2024, the company’s IB fees rose 31.4% year over year. Then again, in 2025, IB fees increased 8.4%.
In the first quarter of 2026, IB fees increased 23.6% year over year. While equity underwriting income increased 31.3%, debt underwriting income rose 2.7%. Advisory revenues grew 46.6%.
Since the market for global mergers and acquisitions has been improving, Bank of America is expected to continue witnessing solid growth in IB fees in the near term, supported by a healthy IB pipeline.
Integration of Artificial Intelligence (AI) With Branch Expansion: Bank of America is integrating AI with its branch expansion strategy by building a “phygital” banking model that combines AI-driven digital capabilities with modern, tech-enabled financial centers. While the bank plans to open more than 150 new centers by 2027, AI tools like Erica, fraud-detection systems and automated workflows are increasingly handling routine transactions and customer interactions.
This allows branch employees to focus on higher-value advisory services and cross-selling products such as mortgages, auto loans and credit cards. The strategy is expected to improve operating efficiency, lower costs, enhance customer engagement and drive stronger fee income and NII growth over the long term, ultimately supporting sustained operating margin expansion.
Strong Balance Sheet & Liquidity Position: As of March 31, 2026, Bank of America had total debt worth $736.6 billion. Its cash and cash-equivalents balance was $242.5 billion. Despite a high debt burden, the company’s liquidity position seems sufficient to meet near-term obligations since BAC has easy access to the debt markets, given its investment-grade long-term credit ratings of A1, A- and AA- from Moody’s, S&P Global Ratings and Fitch Ratings, respectively, along with a stable outlook.
The company has an efficient capital distribution plan, supported by its earnings strength, through which it keeps enhancing shareholder value. After clearing the 2025 stress test, Bank of America raised its quarterly dividend 7.7% to 28 cents per share. Prior to this, it increased its dividend 8.3% in 2024, 9.1% in 2023, 4.8% in 2022 and 17% in 2021.
Also, BAC engages in regular share repurchases. In July 2025, it authorized a $40-billion repurchase program. As of March 31, 2026, $22.9 billion worth of authorization remained available for repurchase.
Bank of America’s Earnings & Valuation Analysis
Analysts seem optimistic regarding BAC’s earnings growth potential. Over the past 30 days, the Zacks Consensus Estimate for the company’s 2026 and 2027 earnings has been revised upward. Earnings estimates for 2026 suggest a year-over-year rise of 17.1%, and the estimates for 2027 indicate growth of 13.6%.
Earnings Estimate Revision
Image Source: Zacks Investment Research
Looking at BAC’s valuation, the stock is currently trading at a 12-month trailing price-to-tangible book (P/TB) of 1.85X, which is below the industry’s 3.09X. This shows that BAC is currently trading at a discount relative to the industry average.
P/TB Ratio (TTM)
Image Source: Zacks Investment Research
JPMorgan has a P/TB of 2.94X, while Morgan Stanley’s P/TB ratio is 3.78X. Thus, currently, BAC is undervalued compared with both JPM and MS.
Should You Invest in Bank of America Stock?
Driven by scalable AI capabilities, a data advantage from its vast customer base and a well-executed strategy that blends digital efficiency with targeted branch expansion, BAC has a strong fundamental positioning. With continued investments in technology and a disciplined expansion approach, the company will likely deliver steady margin expansion and long-term value creation.
In addition to this, the bank continues to benefit from a large, low-cost deposit franchise and improving NII, all of which are expected to support steady profitability.
While the company’s total non-interest expenses have increased at a six-year (2019-2025) CAGR of 4.1% (with the uptrend expected to continue in the near term), a favorable valuation and solid earnings and revenue growth prospects make the Bank of America stock an attractive investment option right now.
View the Zacks #1 Rank List
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BAC Slips 6.5% So Far This Year: Should You Still Buy the Stock?
Key Takeaways
Despite impressive first-quarter 2026 results, supported primarily by loan growth along with trading and investment banking (IB) strength, shares of Bank of America (BAC - Free Report) have lost 6.5% so far this year. Rather than weak fundamentals, macro and sector-wide concerns have been the reason for the price decline.
Fears of a softer U.S. economy, uneven loan demand, persistent inflation, global trade tensions, geopolitical uncertainty and concerns around commercial real estate exposure have been some major concerns that have hurt the banking sector this year.
Year to date, the S&P 500 Index has rallied 9.2%, and the industry to which BAC stock belongs has declined 3%.
If we look at BAC’s two key peers, JPMorgan (JPM - Free Report) and Morgan Stanley (MS - Free Report) , it appears that BAC has underperformed both. Shares of JPMorgan have lost 5.9% so far this year, whereas the Morgan Stanley stock has gained 12.9%.
YTD Price Performance
Image Source: Zacks Investment Research
Now, the question arises whether you should add BAC stock to your portfolio now despite its price decline. In order to understand this, let us dig deeper into the company’s fundamental strength and growth prospects.
Factors Supporting Bank of America Stock
Robust Top-Line Growth: Bank of America has been witnessing an increase in revenues over the past several years. Total net revenues witnessed a compound annual growth rate (CAGR) of 5.7% over the last five years (2020-2025), with the uptrend continuing in the first quarter of 2026.
Revenue Trend
Image Source: Zacks Investment Research
The rise has been driven by consistent loan growth (net loans and leases saw a CAGR of 5.2% over the same time frame) and a favorable interest rate backdrop, along with a decent rise in fee income (total non-interest income witnessed a CAGR of 4.7%).
Despite declines in interest rates in 2024 and 2025, the company’s net interest income (NII) witnessed a CAGR of 6.7% in the five years ended 2025, primarily supported by increasing loan balances. The uptrend for NII continued in the first three months of 2026.
On the expectation of a continued rise in loan balances, along with stabilizing funding costs and fixed-rate asset repricing, BAC’s NII is expected to continue to improve in the near term. This, coupled with fee income growth, will likely keep supporting revenue growth.
The Zacks Consensus Estimate for BAC’s 2026 and 2027 revenues is pegged at $120.81 billion and $126.92 billion, which indicates year-over-year growth rates of 9.6% and 5.1%, respectively.
Revenue Growth Estimates
Image Source: Zacks Investment Research
Solid Investment Banking (IB) Business: BAC’s IB business performance has been impressive of late. When global deal-making came to a grinding halt at the beginning of 2022, it weighed heavily on Bank of America’s IB business. The company’s total IB fees (in the Global Banking division) declined 45.7% in 2022 and 2.4% in 2023.
However, the trend reversed thereafter. In 2024, the company’s IB fees rose 31.4% year over year. Then again, in 2025, IB fees increased 8.4%.
In the first quarter of 2026, IB fees increased 23.6% year over year. While equity underwriting income increased 31.3%, debt underwriting income rose 2.7%. Advisory revenues grew 46.6%.
Since the market for global mergers and acquisitions has been improving, Bank of America is expected to continue witnessing solid growth in IB fees in the near term, supported by a healthy IB pipeline.
Integration of Artificial Intelligence (AI) With Branch Expansion: Bank of America is integrating AI with its branch expansion strategy by building a “phygital” banking model that combines AI-driven digital capabilities with modern, tech-enabled financial centers. While the bank plans to open more than 150 new centers by 2027, AI tools like Erica, fraud-detection systems and automated workflows are increasingly handling routine transactions and customer interactions.
This allows branch employees to focus on higher-value advisory services and cross-selling products such as mortgages, auto loans and credit cards. The strategy is expected to improve operating efficiency, lower costs, enhance customer engagement and drive stronger fee income and NII growth over the long term, ultimately supporting sustained operating margin expansion.
Strong Balance Sheet & Liquidity Position: As of March 31, 2026, Bank of America had total debt worth $736.6 billion. Its cash and cash-equivalents balance was $242.5 billion. Despite a high debt burden, the company’s liquidity position seems sufficient to meet near-term obligations since BAC has easy access to the debt markets, given its investment-grade long-term credit ratings of A1, A- and AA- from Moody’s, S&P Global Ratings and Fitch Ratings, respectively, along with a stable outlook.
The company has an efficient capital distribution plan, supported by its earnings strength, through which it keeps enhancing shareholder value. After clearing the 2025 stress test, Bank of America raised its quarterly dividend 7.7% to 28 cents per share. Prior to this, it increased its dividend 8.3% in 2024, 9.1% in 2023, 4.8% in 2022 and 17% in 2021.
Also, BAC engages in regular share repurchases. In July 2025, it authorized a $40-billion repurchase program. As of March 31, 2026, $22.9 billion worth of authorization remained available for repurchase.
Bank of America’s Earnings & Valuation Analysis
Analysts seem optimistic regarding BAC’s earnings growth potential. Over the past 30 days, the Zacks Consensus Estimate for the company’s 2026 and 2027 earnings has been revised upward. Earnings estimates for 2026 suggest a year-over-year rise of 17.1%, and the estimates for 2027 indicate growth of 13.6%.
Earnings Estimate Revision
Image Source: Zacks Investment Research
Looking at BAC’s valuation, the stock is currently trading at a 12-month trailing price-to-tangible book (P/TB) of 1.85X, which is below the industry’s 3.09X. This shows that BAC is currently trading at a discount relative to the industry average.
P/TB Ratio (TTM)
Image Source: Zacks Investment Research
JPMorgan has a P/TB of 2.94X, while Morgan Stanley’s P/TB ratio is 3.78X. Thus, currently, BAC is undervalued compared with both JPM and MS.
Should You Invest in Bank of America Stock?
Driven by scalable AI capabilities, a data advantage from its vast customer base and a well-executed strategy that blends digital efficiency with targeted branch expansion, BAC has a strong fundamental positioning. With continued investments in technology and a disciplined expansion approach, the company will likely deliver steady margin expansion and long-term value creation.
In addition to this, the bank continues to benefit from a large, low-cost deposit franchise and improving NII, all of which are expected to support steady profitability.
While the company’s total non-interest expenses have increased at a six-year (2019-2025) CAGR of 4.1% (with the uptrend expected to continue in the near term), a favorable valuation and solid earnings and revenue growth prospects make the Bank of America stock an attractive investment option right now.
Currently, BAC carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.