Morgan Stanley Remains Bullish on Bank of America (BAC) Following Strong Q4 Results

Bank of America Corporation (NYSE:BAC) is included in our list of the 10 Goldman Sachs undervalued stocks to invest in.

Morgan Stanley Remains Bullish on Bank of America (BAC) Following Strong Q4 Results

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On January 15, 2026, Morgan Stanley reduced its price target on Bank of America Corporation (NYSE:BAC) from $68.00 to $64.00, while reiterating an ‘Overweight’ rating. The update came after the company posted solid Q4 results, beating consensus EPS by roughly 2%. However, the firm noted the share price drop following the results announcement, as management was expected to tighten its 55%-59% medium-term expense ratio to 54%-58%. The investment firm also touched upon the accounting change, which adds roughly $1.00 billion per quarter to fees, complicates comparisons, and tempers short-term sentiment despite the earnings beat.

The company’s January 14, 2026, earnings release featured diluted EPS of $0.98 versus $0.96 expected, net income of $7.60 billion, and revenue of $28.50 billion, slightly above consensus. The quarter marked trading strength, with sales and trading revenue rising 10% to $4.50 billion, driven by benefits from volatile markets. At the same time, net interest income (NII) rose 9.7% to $15.75 billion. Looking ahead, Bank of America Corporation (NYSE:BAC)’s management expects 7% NII growth in Q1 2026, while reaffirming 5%-7% growth for the full year 2026, with loan growth and easing deposit costs driving optimism.

Bank of America Corporation (NYSE:BAC), a diversified U.S. financial institution, offers consumer banking, wealth management, investment banking, and global market services to individuals, corporations, and institutional clients.

While we acknowledge the potential of BAC to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than BAC and that has 100x upside potential, check out our report about this cheapest AI stock.

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