Is Bank of America (BAC) Below Fair Value After Its 83% Run?

Simply Wall St.04:15

Bank of America has delivered a 3 year share price gain of 82.9%, putting a lot of faith in how effectively it turns its capital base into returns for shareholders. With the stock recently closing at ...

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With the stock recently closing at ...</p>\n\n<a href=\"https://simplywall.st/stocks/us/banks/nyse-bac/bank-of-america/news/is-bank-of-america-bac-below-fair-value-after-its-83-run\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU1280957306.USD","symbol_name":"THREADNEEDLE (LUX) US CONTRARIAN CORE EQUITIES \"AUP\" (USD) INC","start_time":0,"source_url":"https://simplywall.st/stocks/us/banks/nyse-bac/bank-of-america/news/is-bank-of-america-bac-below-fair-value-after-its-83-run","article_id":"2683634876","we_media_id":null,"thumbnails":["https://simplywall.st/cdn-cgi/image/fit=cover,format=auto,width=320,height=240/https://images.simplywall.st/asset/company-cover/19049-card/1788974458487"],"rights":{"source":"simplywall_highlight","url":"https://simplywall.st/stocks/us/banks/nyse-bac/bank-of-america/news/is-bank-of-america-bac-below-fair-value-after-its-83-run","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2683634876","pubTimestamp":1794687353,"columns":[],"sourceInfo":{"source_id":"simplywall_highlight","name":"Simply Wall St."},"weMediaInfo":null,"summary":"AAl BentleyNovember 14, 2026","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU1280957306.USD":"THREADNEEDLE (LUX) US CONTRARIAN CORE EQUITIES \"AUP\" (USD) INC","IE00B1BXHZ80.USD":"Legg Mason ClearBridge - US Appreciation A Acc USD","BK4534":"瑞士信贷持仓","IE00BBT3K403.USD":"LEGG MASON CLEARBRIDGE TACTICAL DIVIDEND INCOME \"A(USD) ACC","LU0321505868.SGD":"Schroder ISF Global Dividend Maximiser A Dis SGD","PGF":"优先金融股指数ETF-PowerShares","LU0321505439.SGD":"Schroder ISF Global Dividend Maximiser A Acc SGD","LU1880398554.USD":"AMUNDI FUNDS GLOBAL EQUITY \"A2\" (USD) INC","LU2129689431.USD":"FRANKLIN GLOBAL INCOME \"A\" (USD) ACC","LU1989771016.USD":"东方汇理环球老龄化投资基金 A2 Acc","LU1291159041.SGD":"CPR Invest - Global Silver Age A2 Acc SGD-H","FTXO":"First Trust Nasdaq Bank ETF","KBWB":"银行ETF-PowerShares","BAC":"美国银行","IE0034235188.USD":"PINEBRIDGE GLOBAL FOCUS EQUITY \"A\" (USD) ACC","TFNS":"T. 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With the stock recently closing at US$51.02 and a mix of news around legal settlements, partnerships and capital allocation, the open question is whether that price lines up with the returns the bank earns on the equity and capital it commits.  A move of 82.9% over 3 years places Bank of America among the stronger performers in large US banking, so there is extra focus on whether its returns on capital are strong enough to support that kind of rerating. The agreement to settle allegations of unauthorized account openings and the continued push into fee-based partnerships such as the Allegiant credit card program can influence the timing and stability of the profits generated on the bank's capital base. Prefer to judge Bank of America on earnings? See what Bank of America's 11.4x P/E says about the price.  The stock's next move may depend on whether Bank of America's current valuation is adequately backed by the returns it earns on its capital today and what investors expect those returns to look like over time. If you are weighing Bank of America on the returns it earns on its capital, it can help to compare it with other stocks in the same conversation by scanning 32 high quality undervalued stocks AdvertisementIs Bank of America a Bargain on Excess Returns? The Excess Returns model looks at how effectively Bank of America turns each dollar of equity into earnings above its own funding cost. On the inputs used here, the bank is assumed to earn a stable $5.31 in earnings per share on a book value base of $39.26, which implies an average return on equity of 12.32%. With the cost of that equity estimated at $3.92 per share, the implied excess return is $1.38 per share, supported by a projected stable book value of $43.07 per share. Those excess returns translate into an estimated intrinsic value that the model views as meaningfully above the recent trading level of US$51.02. The class action settlement over unauthorized accounts helps explain why the market may still be cautious on how durable those returns are, even though the model assumes Bank of America can keep earning more than its equity cost over time. You can see how that gap between model value and share price is calculated in detail by checking the full Excess Returns run for Bank of America. Find out what Bank of America could be worth using our Excess Returns estimate. The Bank of America Narrative: What Would Justify Today's Price? Simply Wall St Narratives for Bank of America pick up where the valuation puzzle leaves off and spell out what would need to happen to Bank of America's growth, margins and earnings for the stock to be worth materially more or less than today's price, sitting on the Community page as a kind of roadmap. Instead of a single ratio or model output, they lay out the future those numbers rely on so you can watch how reality lines up over time. One of the top narratives on Bank of America: 19% undervalued This is the analyst consensus Narrative on Simply Wall St, which compiles analysts' consensus price target and revenue and earnings forecasts, not one person's view. \"The main thing that has to go right is that Bank of America converts its large core deposit base and existing consumer and workplace relationships into higher fee and wealth revenues...\" Discover why this Narrative puts Bank of America at 19% undervalued. Before acting on Bank of America’s valuation, one more piece matters Numbers only tell part of the story, because the people steering Bank of America and the way their pay is structured can heavily influence how that capital is used over time. See who runs Bank of America and how they are paid. This article is general in nature and was produced with the assistance of AI automation,\n        based on data and analysis from Simply Wall St. We provide commentary based on historical data\n        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\n        financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n        Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n        Simply Wall St has no position in any stocks mentioned.Have feedback on this article? Concerned about the content? Get in touch with us directly. 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