Bank of America: Margin Squeeze, Macro Relief

Summary

• We initiate coverage on Bank of America with a Hold rating and $50 price target, citing margin compression and a sub-consensus earnings outlook despite franchise scale.
• Net interest income growth is set to slow, with sticky deposit costs and rising charge-offs limiting EPS upside; capital returns via buybacks offer some support.
• Regulatory and compensation headwinds persist, constraining operating flexibility and offsetting cost-control efforts; further clarity is needed for a more constructive stance.
• Valuation reflects limited near-term catalysts for re-rating; we remain on the sidelines on BAC until capital relief and deposit mix stability improve the risk/reward profile.

Ceri Breeze

Margin Squeeze, Macro Relief

We initiate coverage on Bank of America Corporation (NYSE:BAC) with a Hold rating and $50 PT. BAC is one of the world's largest diversified financial institutions, serving 67mn clients across consumer banking, commercial

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.