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Bank of America Corporation (BAC) stock analysis

Bank of America sits near 9.89x forward earnings after a sharp slide from its August highs

BAC closed at 50.68 on Oct 27, 2026, 22.29% below its 52-week high of 65.22 and down 17.01% over three months after a Oct 14 earnings miss and a securities class action. Valuation is below the industry median and analysts' mean target is 65.50, but momentum is weak and RSI is deeply oversold at 27.88.

  • Price: 50.68
  • Market Cap (USD): $362.50B
  • P/E: 11.29×
  • Fwd P/E: 9.89×
  • Div Yield: 2.29%
  • 1Y Return: -3.60%
  • Next Earnings: Jan 13, 2027
  • Mean Target: 65.50
  • Rating: Strong Buy

Bull case

  • Forward P/E of 9.89× (on next fiscal year's consensus) is below the industry median of 10.96×, and price-to-book is 1.22×.
  • Analysts' mean target is 65.50 from 16 analysts, 29.24% above the price, and the consensus label is Buy with 35 Buy ratings against 1 Sell.
  • Consensus EPS growth for next year is 16.89%, in the 74th percentile of US Financials, with dividend yield of 2.29% and 12 years of dividend growth.

Bear case

  • Q3 FY2026 EPS of 0.91 was below 1.06 a year earlier, and the Oct 14 report missed EPS consensus by 1.82% and revenue by 1.91%; the stock fell 4.19% that day.
  • Shares trade 11.37% below the 50-day average and 7.86% below the 200-day average; the relative strength rating is 36 and 3-month return sits in the 3rd percentile of sector peers.
  • Multiple law firms announced securities class actions on Oct 28, 2026, with a Dec 15 lead plaintiff deadline; one headline cites $1.21 Billion in penalties and a 4% stock drop.

What to watch

  • Next earnings on Jan 13, 2027 (before market open), with next-quarter consensus EPS of 1.15.
  • Ex-dividend date Dec 4, 2026 for a 0.32 quarterly dividend.
  • Support at the 20-day low of 49.26 and the 52-week low of 46.12; resistance at the 20-day average of 52.45 and 20-day high of 55.11.
  • Dec 15, 2026 lead plaintiff deadline in the securities class action.

General

Bank of America is a bank and financial holding company with Consumer Banking, wealth management, Global Banking and Global Markets segments. The stock has fallen sharply since August while valuation has compressed below the industry median. Analysts remain positive on targets, but recent results and legal headlines weigh.

Business and results

The company operates through Consumer Banking, GWIM, Global Banking, Global Markets and All Other. Trailing revenue is $194.74B and net income is 32.12B. Q3 FY2026 revenue was 47.77B against 48.22B a year earlier, and quarterly EPS growth is -14.15% year over year.

Valuation in context

Forward P/E is 9.89× on next fiscal year consensus, against an industry median of 10.96× and a sector median of 10.93×. Price-to-book is 1.22× and ROE is 10.69%, in the 31st percentile versus a sector median of 13.16%.

Analysts and market signals

Analysts' mean target is 65.50 from 16 analysts. Several targets were cut on Oct 15, including Morgan Stanley to 61 from 67 and Wells Fargo to 64 from 69. Ratings were reiterated by RBC, Morgan Stanley and KBW. Short float is 1.24% as of Oct 15.

Long-term investor

Multi-year revenue and earnings growth has been solid, and the company has shrunk its share count while raising dividends. Returns on equity are modest versus peers, and leverage is above the sector median. Valuation is below the industry median, but the legal overhang is unresolved.

Growth and margins

Revenue grew at a 3-year CAGR of 18.52%, though the latest quarter was -0.94% year over year. Annual EPS rose from 3.22 in FY2024 to 3.82 in FY2025. Operating margin is 22.40%, up 5.26% over a year, versus a sector median of 22.18%.

Balance sheet and returns

ROE is 10.69% and ROA is 0.94%. Debt-to-equity is 1.28×, in the 66th percentile versus a sector median of 0.77×. Total equity is 296.75B against total assets of 3.43T. The Piotroski F-score is 8.

Capital return and ownership

FY2025 buybacks were 24.10B and dividends paid 9.56B; shares outstanding fell 4.12% over a year. Dividend growth is 7.89% over three years with a payout ratio of 27.68%. Institutions hold 75.67%. The CEO had monthly scheduled dispositions through Oct 15, 2026.

Estimates

Consensus EPS is 4.38 for the current fiscal year and 5.12 for the next. Analysts cut several price targets in October, though the mean remains 65.50.

Swing trader

The trend is firmly down: price is below its 20-, 50- and 200-day averages, and RSI is oversold at 27.88. ADX of 49.72 signals a strong trend. Shares have consolidated near 50 since the Oct 14 earnings drop.

Trend and momentum

Price of 50.68 is below the 20-day average of 52.45, 50-day of 57.18 and 200-day of 55.00. RSI is 27.88, MACD is -1.88 against a signal of -1.95, and the histogram is 0.07. Three-month return is -17.01%.

Recent sessions and levels

After a 118.0M-share drop to 51.39 on Oct 14, closes have ranged 50.39 to 51.70. Volume faded to 24.6M on Oct 27, 0.60× relative. Nearby levels: 20-day low 49.26, 52-week low 46.12, 20-day high 55.11.

Risk and flow

ATR is 1.16, or 2.30% of price. Short interest was 88.8M shares (1.24% of float) on Oct 15, up 3.63%. No upgrades or downgrades in 30 days, but multiple target cuts on Oct 15. Next earnings are Jan 13, 2027; ex-dividend is Dec 4.

Options

Implied volatility is moderate and low-to-mid in its yearly range, with a modest premium over realized volatility. The term structure is in contango and liquidity is strong, though the latest session's options volume was about half its average.

Volatility level

30-day implied volatility is 23.84%, with a 52-week rank of 26 and percentile of 31, within a range of 18.50% to 38.80%. It is down 5.7 pts over 20 days. Implied is 1.11× the 30-day historical volatility of 21.57%.

Term structure and moves

IV is 25.17% at 60 days and 26.01% at 90 days, contango with a +2.2 pts slope. Skew is +0.7 pts. The 30-day expected move is 6.83% (3.46) and the 7-day is 3.30%. No earnings fall before the Nov 27 expiry.

Earnings history and premium

Average earnings move was 2.90% over four quarters and 2.15% over eight, with a maximum of 4.19%. The 30-day at-the-money put premium is 1.44. Cash-secured put yield is 16.34% annualized and covered call yield is 12.78%; premium is modestly rich versus realized volatility.

Liquidity and flow

The liquidity score is 100 with open interest of 2.4M. Put/call volume ratio is 1.00× and open interest ratio is 1.19×. Put premium of $18.0M exceeded call premium of $11.2M on the day.

Analysis written October 28, 2026 from Qanvo data as of October 27, 2026. AI-generated, for information only; not investment advice.