Erste Group Bank Expects Weaker Earnings for Bank of America

Key Points

• Erste Group Bank lowered Bank of America’s FY2026 EPS forecast to $4.55 from $4.64, below the broader consensus estimate of $4.61; it projects FY2027 EPS of $5.22.
• Bank of America’s latest quarterly results exceeded expectations, with EPS of $1.21 versus $1.13 estimated and revenue of $31.56 billion, up 19.6% year over year.
• Analysts maintain a generally positive view, with a “Moderate Buy” consensus and average price target of $64.22, while the bank raised its quarterly dividend to $0.32, implying a 2.3% yield.

Bank of America Corporation (NYSE:BAC - Free Report) - Analysts at Erste Group Bank reduced their FY2026 EPS estimates for shares of Bank of America in a research note issued to investors on Thursday, October 8th. Erste Group Bank analyst H. Engel now anticipates that the financial services provider will earn $4.55 per share for the year, down from their prior forecast of $4.64. The consensus estimate for Bank of America's current full-year earnings is $4.61 per share. Erste Group Bank also issued estimates for Bank of America's FY2027 earnings at $5.22 EPS.

Bank of America (NYSE:BAC - Get Free Report) last announced its earnings results on Tuesday, July 14th. The financial services provider reported $1.21 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $1.13 by $0.08. Bank of America had a return on equity of 12.20% and a net margin of 17.56%. The business had revenue of $31.56 billion for the quarter, compared to analyst estimates of $30.78 billion. During the same period in the previous year, the company earned $0.89 earnings per share. The company's revenue for the quarter was up 19.6% compared to the same quarter last year.

Other equities research analysts have also issued research reports about the company. Morgan Stanley restated an "overweight" rating on shares of Bank of America in a research note on Tuesday, September 15th. Argus set a $70.00 price objective on Bank of America in a report on Wednesday, July 15th. Oppenheimer lowered Bank of America from an "outperform" rating to a "market perform" rating in a research report on Tuesday, June 30th. Keefe, Bruyette & Woods increased their target price on Bank of America from $67.00 to $70.00 and gave the company an "outperform" rating in a research note on Wednesday, July 15th. Finally, Jefferies Financial Group reduced their target price on Bank of America from $75.00 to $70.00 and set a "buy" rating for the company in a research note on Thursday, September 24th. Nineteen equities research analysts have rated the stock with a Buy rating and seven have assigned a Hold rating to the company's stock. According to data from MarketBeat.com, the company has an average rating of "Moderate Buy" and an average target price of $64.22.

Bank of America Trading Up 0.4%

NYSE:BAC opened at $54.53 on Tuesday. The stock has a market cap of $381.31 billion, a price-to-earnings ratio of 12.51, a price-to-earnings-growth ratio of 0.87 and a beta of 1.21. Bank of America has a one year low of $46.12 and a one year high of $65.22. The company has a debt-to-equity ratio of 1.23, a quick ratio of 0.82 and a current ratio of 0.83. The business's 50-day simple moving average is $59.93 and its 200 day simple moving average is $56.63.

Bank of America Increases Dividend

The business also recently announced a quarterly dividend, which was paid on Friday, September 25th. Stockholders of record on Friday, September 4th were paid a $0.32 dividend. This is a boost from Bank of America's previous quarterly dividend of $0.28. The ex-dividend date was Friday, September 4th. This represents a $1.28 dividend on an annualized basis and a dividend yield of 2.3%. Bank of America's dividend payout ratio (DPR) is currently 29.36%.

Hedge Funds Weigh In On Bank of America

Several large investors have recently modified their holdings of BAC. Turim 21 Investimentos Ltda. bought a new stake in shares of Bank of America in the second quarter valued at about $25,000. Abound Financial LLC acquired a new stake in Bank of America during the fourth quarter worth about $26,000. Cherry Tree Wealth Management LLC increased its stake in Bank of America by 167.6% during the second quarter. Cherry Tree Wealth Management LLC now owns 479 shares of the financial services provider's stock valued at $27,000 after acquiring an additional 300 shares during the period. Principia Wealth Advisory LLC increased its stake in Bank of America by 69.9% during the second quarter. Principia Wealth Advisory LLC now owns 530 shares of the financial services provider's stock valued at $30,000 after acquiring an additional 218 shares during the period. Finally, Vermillion Wealth Management Inc. raised its holdings in Bank of America by 199.1% in the 1st quarter. Vermillion Wealth Management Inc. now owns 658 shares of the financial services provider's stock valued at $32,000 after acquiring an additional 438 shares in the last quarter. Institutional investors own 70.71% of the company's stock.

Key Bank of America News

Here are the key news stories impacting Bank of America this week:

• Positive Sentiment: Bank of America’s earnings setup includes a favorable comparison with the prior quarter: it previously exceeded consensus estimates for both earnings and revenue, while revenue increased 19.6% year over year. Investors will be looking for evidence that lending and fee-based businesses remain resilient. Is Bank of America's Stock a Buy Ahead of Its Q3 Earnings Report on Oct. 14?
• Neutral Sentiment: The options market is pricing in a relatively muted reaction to the earnings release, suggesting traders are not positioning for an unusually large move. The report and management’s outlook will determine whether the stock can recover. Bank of America Earnings Preview: Options Market Signals a Muted Reaction
• Neutral Sentiment: Bank of America’s research division is warning that market risks are increasing but continues to recommend select stocks. The commentary highlights a more cautious investment backdrop rather than a direct change to BAC’s fundamentals. Bank of America Warns of Growing Market Risks
• Negative Sentiment: Rising government borrowing costs and yields are raising concerns about slower dealmaking and lending growth, while potentially increasing banks’ funding costs. These pressures could weigh on BAC’s net interest income and investment-banking results. Q3 Earnings Season Begins: Global Week Ahead
• Negative Sentiment: A broader selloff across bank stocks has pushed many financial shares into correction territory, adding sector-wide pressure to BAC ahead of earnings. Investors remain focused on whether high rates are hurting loan demand, credit quality and market valuations. Why bank stocks shocked everyone by getting thrashed

Bank of America Company Profile

Bank of America Corporation NYSE: BAC is a diversified financial services company serving individual consumers, small businesses, middle-market companies and large corporations. Its principal businesses include consumer banking, wealth and investment management, commercial banking, corporate and investment banking, and sales and trading.

Through its banking and financial services businesses, the company offers deposit accounts, credit cards, mortgages, home equity products, consumer and business loans, payment services, treasury management, brokerage services and investment advice.

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