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BAC Gains 17.4% in 6 Months: Should You Invest in the Stock Now?
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Key Takeaways
BAC gained 17.4% in six months as stronger NII, loans and fee income supported earnings growth.
BAC's IB fees rose 36.4% y/y in the first half of 2026, led by advisory and underwriting gains.
BAC's valuation discount and capital returns are positives, but expense growth is a near-term risk.
Shares of Bank of America (BAC - Free Report) have gained 17.4% over the past six months, supported by improving fundamentals and a favorable operating backdrop. In the first two quarters of 2026, the bank delivered solid earnings growth, driven by higher net interest income (NII), healthy loan and deposit growth, and strength across its fee-based businesses.
The broader macro environment has also been supportive. A resilient U.S. economy, sustained consumer spending, stronger capital-markets activity and a relatively favorable interest-rate backdrop have helped bolster banking revenues and investor sentiment.
Despite these positives, BAC has lagged two of its key peers over the same period. JPMorgan (JPM - Free Report) shares have risen 18.6% in the past six months, while Morgan Stanley (MS - Free Report) has advanced 22.3% compared with BAC’s 17.4% gain.
6-Month Price Performance
Image Source: Zacks Investment Research
While Bank of America’s six-month price performance has trailed its peers, the stock’s rally reflects strengthening fundamentals and supportive macro trends.
The key question now is whether there is further upside from the current levels. To assess that, let us take a closer look at BAC’s underlying strengths, growth drivers and key risks.
Key Positives of Bank of America
Robust Top-Line Growth: Bank of America has maintained a solid revenue growth trajectory over the past several years, supported by expanding loan balances, higher NII and steady growth in fee-based revenues.
The company’s net loans and leases saw a compound annual growth rate (CAGR) of 5.2% from 2020 to 2025. Aided by this loan growth and favorable balance-sheet positioning, NII witnessed a 6.7% CAGR over the same period despite declines in interest rates in 2024 and 2025.
Meanwhile, non-interest income saw a CAGR of 4.7%, helping total revenues see a 5.7% CAGR. The upward momentum in revenues continued in the first half of 2026.
Revenue Trend
Image Source: Zacks Investment Research
Looking ahead, BAC’s top-line growth prospects remain favorable. An elevated interest-rate environment, continued loan growth and the repricing of fixed-rate assets are expected to keep supporting NII in the near term. Management expects 2026 NII on an FTE basis to grow toward the upper end of 6-8%. Continued growth in fee-generating businesses should provide an additional revenue tailwind.
Reflecting these trends, the Zacks Consensus Estimate for BAC’s revenues is pegged at $123.8 billion for 2026 and $130.4 billion for 2027, implying year-over-year growth of 12.2% and 5.3%, respectively.
Revenue Growth Estimates
Image Source: Zacks Investment Research
Strong Recovery in IB Business: Bank of America’s investment banking (IB) business has regained strong momentum following the industry-wide slowdown in global deal-making during 2022-2023.
After IB fees declined 45.7% in 2022 and 2.4% in 2023, the franchise rebounded with 31.4% growth in 2024 and an 8.4% increase in 2025. The recovery accelerated in the first half of 2026, with IB fees rising 36.4% year over year, driven by a 61% surge in advisory revenues, a 52.8% increase in equity underwriting fees and a 10.9% rise in debt underwriting income.
With corporate confidence improving, capital markets reopening and Bank of America maintaining a robust investment banking pipeline, the company is well-positioned to sustain fee income growth and diversify earnings beyond its traditional lending business.
Industry-Leading Deposit Franchise: Bank of America benefits from a large and well-diversified deposit base, which provides a stable and relatively low-cost source of funding. As of June 30, 2026, total deposits stood at $2.03 trillion, rising 1% year over year.
These deposits are spread across consumer, wealth management and commercial banking clients, reducing reliance on any single funding source. The strength of this deposit franchise helps BAC keep funding costs under control, supports loan growth and provides stability to NII, particularly during periods of market or interest-rate volatility.
Accelerating Digital & AI-Led Transformation: Bank of America continues to invest in digital banking, artificial intelligence (AI) and payments while selectively expanding its branch network. The bank plans to open more than 150 financial centers by 2027, supporting deeper client relationships and cross-selling opportunities.
Its digital ecosystem is also gaining scale, with Erica surpassing 3.2 billion client interactions and Zelle reaching 25 million users. Enhanced AI tools such as EricaAssist are improving service efficiency, while new cross-border payment capabilities through Swift and CashPro could strengthen its global payments franchise. In addition, the proposed investment in Jio Credit offers exposure to India’s expanding digital lending market. Together, these initiatives should support efficiency gains, stronger client engagement and long-term fee and earnings growth.
Strong Liquidity & Funding Profile: Despite carrying $732.1 billion in total debt as of June 30, 2026, Bank of America maintains a robust liquidity position, supported by $229.7 billion in cash and cash equivalents, one of the industry’s strongest deposit franchises, and diversified funding sources. The bank also maintains substantial liquidity reserves well above regulatory requirements, providing financial flexibility across economic cycles.
Reinforcing its balance sheet strength, Bank of America continues to hold high investment-grade long-term credit ratings of A1 (Moody’s), A- (S&P Global Ratings) and AA- (Fitch Ratings), all with stable outlooks. These ratings ensure reliable access to capital markets at competitive funding costs, enabling the bank to meet its obligations and support business growth even during periods of market stress.
Robust Capital Returns Strategy: Bank of America continues to demonstrate its commitment to enhancing shareholder returns through consistent dividend growth and share repurchases. Following its successful performance in the 2026 Federal Reserve stress test, the bank increased its quarterly dividend 14.3% to 32 cents per share, marking its sixth consecutive annual dividend hike.
The company has also maintained an active capital return program, with $17 billion remaining under its $40-billion share repurchase authorization as of June 30, 2026. Supported by strong capital ratios, resilient earnings and excess capital generation, Bank of America is well-positioned to sustain attractive shareholder distributions while continuing to invest in long-term growth initiatives.
Bank of America’s Earnings & Valuation Analysis
Looking at BAC’s valuation, the stock is currently trading at a 12-month trailing price-to-tangible book (P/TB) of 1.95X, which is below the industry’s 3.15X. 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 3.14X, while Morgan Stanley’s P/TB ratio is 3.59X. Thus, currently, BAC is undervalued compared with JPM and MS.
However, analysts do not seem too optimistic regarding BAC’s earnings growth potential. Over the past 30 days, the Zacks Consensus Estimate for the company’s 2026 earnings has been revised lower while the 2027 estimate has been unchanged.
Earnings Estimate Revision
Image Source: Zacks Investment Research
Should You Invest in Bank of America Stock Now?
BAC’s improving revenue trajectory, strong deposit franchise and recovery in IB activity provide a solid foundation for earnings. Its ongoing investments in digital banking, AI and payments should also support operating efficiency and deepen customer engagement over the long term. The stock’s attractive valuation relative to the industry and peers, along with healthy capital levels and substantial capital-return capacity, strengthens the longer-term investment case.
However, near-term upside may be somewhat tempered by persistent expense growth and less favorable earnings estimate revision trend. Continued spending on technology, personnel and branch expansion could constrain operating leverage, while the recent downward revision to the 2026 earnings estimate suggests limited catalysts for a meaningful upside in the near term.
Thus, although BAC’s fundamentals remain sound and its valuation appears reasonable, the combination of cost pressures and muted earnings estimate momentum supports a cautious stance on the stock at present.
Bank of America currently carries a Zacks Rank #3 (Hold), suggesting investors may prefer to retain their positions while waiting for a more favorable entry point or stronger earnings momentum. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
View the Zacks #1 Rank List
Image: Bigstock
BAC Gains 17.4% in 6 Months: Should You Invest in the Stock Now?
Key Takeaways
Shares of Bank of America (BAC - Free Report) have gained 17.4% over the past six months, supported by improving fundamentals and a favorable operating backdrop. In the first two quarters of 2026, the bank delivered solid earnings growth, driven by higher net interest income (NII), healthy loan and deposit growth, and strength across its fee-based businesses.
The broader macro environment has also been supportive. A resilient U.S. economy, sustained consumer spending, stronger capital-markets activity and a relatively favorable interest-rate backdrop have helped bolster banking revenues and investor sentiment.
Despite these positives, BAC has lagged two of its key peers over the same period. JPMorgan (JPM - Free Report) shares have risen 18.6% in the past six months, while Morgan Stanley (MS - Free Report) has advanced 22.3% compared with BAC’s 17.4% gain.
6-Month Price Performance
Image Source: Zacks Investment Research
While Bank of America’s six-month price performance has trailed its peers, the stock’s rally reflects strengthening fundamentals and supportive macro trends.
The key question now is whether there is further upside from the current levels. To assess that, let us take a closer look at BAC’s underlying strengths, growth drivers and key risks.
Key Positives of Bank of America
Robust Top-Line Growth: Bank of America has maintained a solid revenue growth trajectory over the past several years, supported by expanding loan balances, higher NII and steady growth in fee-based revenues.
The company’s net loans and leases saw a compound annual growth rate (CAGR) of 5.2% from 2020 to 2025. Aided by this loan growth and favorable balance-sheet positioning, NII witnessed a 6.7% CAGR over the same period despite declines in interest rates in 2024 and 2025.
Meanwhile, non-interest income saw a CAGR of 4.7%, helping total revenues see a 5.7% CAGR. The upward momentum in revenues continued in the first half of 2026.
Revenue Trend
Image Source: Zacks Investment Research
Looking ahead, BAC’s top-line growth prospects remain favorable. An elevated interest-rate environment, continued loan growth and the repricing of fixed-rate assets are expected to keep supporting NII in the near term. Management expects 2026 NII on an FTE basis to grow toward the upper end of 6-8%. Continued growth in fee-generating businesses should provide an additional revenue tailwind.
Reflecting these trends, the Zacks Consensus Estimate for BAC’s revenues is pegged at $123.8 billion for 2026 and $130.4 billion for 2027, implying year-over-year growth of 12.2% and 5.3%, respectively.
Revenue Growth Estimates
Image Source: Zacks Investment Research
Strong Recovery in IB Business: Bank of America’s investment banking (IB) business has regained strong momentum following the industry-wide slowdown in global deal-making during 2022-2023.
After IB fees declined 45.7% in 2022 and 2.4% in 2023, the franchise rebounded with 31.4% growth in 2024 and an 8.4% increase in 2025. The recovery accelerated in the first half of 2026, with IB fees rising 36.4% year over year, driven by a 61% surge in advisory revenues, a 52.8% increase in equity underwriting fees and a 10.9% rise in debt underwriting income.
With corporate confidence improving, capital markets reopening and Bank of America maintaining a robust investment banking pipeline, the company is well-positioned to sustain fee income growth and diversify earnings beyond its traditional lending business.
Industry-Leading Deposit Franchise: Bank of America benefits from a large and well-diversified deposit base, which provides a stable and relatively low-cost source of funding. As of June 30, 2026, total deposits stood at $2.03 trillion, rising 1% year over year.
These deposits are spread across consumer, wealth management and commercial banking clients, reducing reliance on any single funding source. The strength of this deposit franchise helps BAC keep funding costs under control, supports loan growth and provides stability to NII, particularly during periods of market or interest-rate volatility.
Accelerating Digital & AI-Led Transformation: Bank of America continues to invest in digital banking, artificial intelligence (AI) and payments while selectively expanding its branch network. The bank plans to open more than 150 financial centers by 2027, supporting deeper client relationships and cross-selling opportunities.
Its digital ecosystem is also gaining scale, with Erica surpassing 3.2 billion client interactions and Zelle reaching 25 million users. Enhanced AI tools such as EricaAssist are improving service efficiency, while new cross-border payment capabilities through Swift and CashPro could strengthen its global payments franchise. In addition, the proposed investment in Jio Credit offers exposure to India’s expanding digital lending market. Together, these initiatives should support efficiency gains, stronger client engagement and long-term fee and earnings growth.
Strong Liquidity & Funding Profile: Despite carrying $732.1 billion in total debt as of June 30, 2026, Bank of America maintains a robust liquidity position, supported by $229.7 billion in cash and cash equivalents, one of the industry’s strongest deposit franchises, and diversified funding sources. The bank also maintains substantial liquidity reserves well above regulatory requirements, providing financial flexibility across economic cycles.
Reinforcing its balance sheet strength, Bank of America continues to hold high investment-grade long-term credit ratings of A1 (Moody’s), A- (S&P Global Ratings) and AA- (Fitch Ratings), all with stable outlooks. These ratings ensure reliable access to capital markets at competitive funding costs, enabling the bank to meet its obligations and support business growth even during periods of market stress.
Robust Capital Returns Strategy: Bank of America continues to demonstrate its commitment to enhancing shareholder returns through consistent dividend growth and share repurchases. Following its successful performance in the 2026 Federal Reserve stress test, the bank increased its quarterly dividend 14.3% to 32 cents per share, marking its sixth consecutive annual dividend hike.
The company has also maintained an active capital return program, with $17 billion remaining under its $40-billion share repurchase authorization as of June 30, 2026. Supported by strong capital ratios, resilient earnings and excess capital generation, Bank of America is well-positioned to sustain attractive shareholder distributions while continuing to invest in long-term growth initiatives.
Bank of America’s Earnings & Valuation Analysis
Looking at BAC’s valuation, the stock is currently trading at a 12-month trailing price-to-tangible book (P/TB) of 1.95X, which is below the industry’s 3.15X. 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 3.14X, while Morgan Stanley’s P/TB ratio is 3.59X. Thus, currently, BAC is undervalued compared with JPM and MS.
However, analysts do not seem too optimistic regarding BAC’s earnings growth potential. Over the past 30 days, the Zacks Consensus Estimate for the company’s 2026 earnings has been revised lower while the 2027 estimate has been unchanged.
Earnings Estimate Revision
Image Source: Zacks Investment Research
Should You Invest in Bank of America Stock Now?
BAC’s improving revenue trajectory, strong deposit franchise and recovery in IB activity provide a solid foundation for earnings. Its ongoing investments in digital banking, AI and payments should also support operating efficiency and deepen customer engagement over the long term. The stock’s attractive valuation relative to the industry and peers, along with healthy capital levels and substantial capital-return capacity, strengthens the longer-term investment case.
However, near-term upside may be somewhat tempered by persistent expense growth and less favorable earnings estimate revision trend. Continued spending on technology, personnel and branch expansion could constrain operating leverage, while the recent downward revision to the 2026 earnings estimate suggests limited catalysts for a meaningful upside in the near term.
Thus, although BAC’s fundamentals remain sound and its valuation appears reasonable, the combination of cost pressures and muted earnings estimate momentum supports a cautious stance on the stock at present.
Bank of America currently carries a Zacks Rank #3 (Hold), suggesting investors may prefer to retain their positions while waiting for a more favorable entry point or stronger earnings momentum. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.