Bank Analyst Predicts Potential $53 Price Point for Bank of America Stock
Bank of America's stock soared in 2024, surpassing the S&P 500 by a impressive 30%. Bullish sentiments continue to swirl around the bank, thanks to a fresh analysis by Truist Securities analyst John McDonald. In January, post Bank of America's Q4 2024 results, McDonald revised his price target, setting it at $53 per share, a $1 increase from his previous estimate. He remained firm in his buy recommendation.
According to the analyst's report, the price adjustment corresponds with tweaks to his full-year profitability estimates for 2025 and 2026. Although he trimmed his 2025 per-share earnings estimate by 1%, he also boosted his 2026 prediction by the same percentage.
McDonald is anticipating Bank of America to splash out on share buybacks in the upcoming years. He expects repurchases to skyrocket from 2024's $14 billion to $17 billion in 2025 and an even more dramatic increase to $24 billion in 2026.
Economic boom times benefit the banking sector, and with the economy showing signs of recovery from inflation concerns, U.S. lenders, including Bank of America, stand to gain. If the economic momentum persists, investing in this influential bank with a substantial customer base promises a great way to capitalize on the positive trend.
The analyst's optimistic outlook is underpinned by several factors, such as Bank of America's expected net interest income (NII) growth, robust share buybacks, strong capital and liquidity, favorable market conditions, and a long-term strategic focus on innovation.
Given the impressive stock performance of Bank of America and the optimistic analysis by Truist Securities, some investors might consider allocating more money towards financing this company's growth. As John McDonald forecasts increased share buybacks from $14 billion in 2024 to $24 billion in 2026, investing in Bank of America could potentially yield significant returns.
