Investors in Bank of America Corporation (NYSE:BAC) had a good week, as its shares rose 7.1% to close at US$42.80 following the release of its quarterly results. The result was positive overall - although revenues of US$25b were in line with what the analysts predicted, Bank of America surprised by delivering a statutory profit of US$0.81 per share, modestly greater than expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Following the latest results, Bank of America's 16 analysts are now forecasting revenues of US$106.2b in 2025. This would be a solid 12% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 27% to US$3.61. Before this earnings report, the analysts had been forecasting revenues of US$105.9b and earnings per share (EPS) of US$3.59 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$45.79. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Bank of America analyst has a price target of US$53.00 per share, while the most pessimistic values it at US$39.50. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Bank of America's rate of growth is expected to accelerate meaningfully, with the forecast 9.7% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 4.2% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.5% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Bank of America is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$45.79, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Bank of America going out to 2026, and you can see them free on our platform here..
Before you take the next step you should know about the 1 warning sign for Bank of America that we have uncovered.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
