1 Wall Street Analyst Thinks Bank of America Stock Is Going to $44. Is It a Buy at Around $37?
As April gets underway, Bank of America (NYSE: BAC) stock trades around $37.50 per share, quite close to its 52-week high.
Although some analysts can get jittery when a stock approaches a near-term peak, one of Bank of America's fellow lending giants doesn't appear to be. In fact, it recently raised its price target on BofA stock by 10% and maintained its equivalent of a buy recommendation.
Is this enthusiasm realistic, though?
All's well, according to Wells
The banking peer providing the price target boost was Wells Fargo. As March came to a close, its prognosticator Mike Mayo upped his Bank of America price target to $44 per share over the next 12 months or so, from the preceding $40. In doing so, he kept his overweight rating intact on the stock.
Mayo's move came on the back of the analyst's uptick in his estimate for Bank of America's current (first) quarter per-share earnings figure.
He said one factor in this was more-robust-than-expected capital markets -- the company is energetically active in investment banking. In fact, it set new revenue records for both the fourth quarter and full year 2023 in its global markets division. Other bright spots, in Mayo's view, include what he termed the bank's "solid" credit and expense management. All should result in a return on average tangible common equity (ROTCE) of around 13%.
A bank for believers
Banks are cyclical businesses, so if you're a believer in the near future of the U.S. economy, Bank of America is a good stock play. It's not the most efficient or dynamic of the big four -- for my money, JPMorgan Chase tops it in both respects -- but it's an influential lender that's effectively managed and should continue to do well as long as our economy keeps humming.
Should you invest $1,000 in Bank of America right now?
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JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bank of America and JPMorgan Chase. The Motley Fool has a disclosure policy.
1 Wall Street Analyst Thinks Bank of America Stock Is Going to $44. Is It a Buy at Around $37? was originally published by The Motley Fool
