Wells Fargo Maintains Buy Rating on Bank of America (BAC) Stock

On May 28, Wells Fargo analyst Mike Mayo reiterated a Buy rating on Bank of America Corp. (NYSE:BAC) with an unchanged price target of $56.

Mayo believes that Bank of America has significantly strengthened its balance sheet over the last 15 years, as evidenced by its performance in the Federal Reserve’s stress tests. Additionally, the bank’s recent earnings growth provides it with a greater cushion to absorb unexpected losses. This signifies that the bank will be much more resilient in challenging economic conditions.

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The analyst also notes that stronger earnings reflect solid performance across key areas such as loan, deposit, and account growth, along with a more efficient cost structure. Based on his estimates, Bank of America is expected to grow EPS by over 40% over the next three years.

Another reason behind Mayo’s optimistic thesis is its attractive valuation. BAC currently trades at the lower end of its historical forward price-to-earnings range, which the analyst finds appealing.

Bank of America Corp. (NYSE:BAC) is an American multinational investment bank and financial services holding company. It is the second-largest banking institution in the United States and the second-largest bank globally by market capitalization.

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Disclosure: None.