Bank of America: Positioned for Growth with Favorable Risk/Reward and Regulatory Tailwinds

Bank of America (BAC – Research Report), the Financial sector company, was revisited by a Wall Street analyst today. Analyst Keith Horowitz from Citi upgraded the rating on the stock to a Buy and gave it a $54.00 price target.

Keith Horowitz has given his Buy rating due to a combination of factors that suggest Bank of America is well-positioned for growth. He highlights the significant valuation gap between Bank of America and JPMorgan Chase, noting that the current situation offers a favorable risk/reward scenario for investors. The bank’s net interest income is expected to benefit from swap maturities and fixed-rate assets, leading to an expansion in net interest margins over the coming years.
Additionally, Bank of America’s low-risk profile in the regulatory landscape is seen as an advantage, with potential benefits from a lighter regulatory environment. Horowitz anticipates that a rewrite of Basel III regulations could further enhance the bank’s returns. As a result, he has raised the target price for Bank of America to $54, reflecting a more optimistic view on its cost of equity aligning with industry peers. The expected share price return of 20.6% underscores his positive outlook for the stock.

In another report released yesterday, Wells Fargo also maintained a Buy rating on the stock with a $52.00 price target.

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Bank of America (BAC) Company Description:

Bank of America Corp. provides banking and nonbank financial services. It operates through the following segments: Consumer Banking, Global Wealth and Investment Management, Global Banking, Global Markets, and All Other. The company was founded by Amadeo Peter Giannini in 1904 is headquartered in Charlotte, NC.