Bank of America Q3 EPS Beats by $0.13, Revenue Rises 10.8% to $27.05 Billion
Bank of America delivered Q3 EPS of $1.06, beating estimates by $0.13 on 10.8% revenue growth to $27.05 billion, with a 15.7% net margin and 10.8% ROE. Wells Fargo lifted its price target from $60 to $62 and Argus boosted its target from $53 to $58, underpinning a consensus $58.59 rating.
1. CFRA Forecasts Strong Bank Earnings Momentum
Ken Leon, director of equity research at CFRA, told Squawk Box that the upcoming quarterly reports from the largest U.S. banks are expected to deliver robust results. He highlighted that net interest income should benefit from persistently elevated loan yields, forecasting a 7% year-over-year rise in revenue for Bank of America’s banking division. Leon further noted improving credit quality metrics, with nonperforming assets projected to decline by 10 basis points to 0.75% of total loans, supporting a higher return on equity, which CFRA estimates will reach 11.2% for the quarter.
2. Braun Stacey Associates Raises Bank of America Stake
In its latest SEC filing, Braun Stacey Associates Inc. reported a 6.5% increase in its Bank of America shareholding during the third quarter, adding 31,008 shares to bring its total to 509,036. The new position carries a book value of $26.26 million. Other institutional moves include Norges Bank’s establishment of a $5.09 billion stake in the second quarter, while Arrowstreet Capital more than doubled its position to 17.6 million shares, representing an $833.8 million investment. Overall, institutional investors now control 70.7% of the company’s outstanding stock.
3. Third-Quarter Results Exceed Expectations, Dividend Holds Steady
Bank of America reported third-quarter earnings per share of $1.06, surpassing the consensus estimate of $0.93, driven by $27.05 billion in total revenue, up 10.8% year-over-year. Net margin expanded to 15.7%, and return on equity reached 10.8%. The firm declared a quarterly dividend of $0.28 per share, translating to an annualized payout ratio of 30.5% and a yield near 2.0%, unchanged from the prior quarter. Looking ahead, analysts anticipate full-year earnings of $3.70 per share based on current consensus.
4. Analysts Lift Ratings and Targets on BAC Shares
Following the strong quarterly performance, several research houses raised their outlooks on Bank of America stock. Argus boosted its target from $53 to $58, while Wells Fargo lifted its price objective to $62 and maintained an overweight recommendation. Ameriprise upgraded the shares to a buy rating, and Wall Street Zen moved from sell to hold. Across 28 analyst reports, 23 carry buy ratings and five maintain hold, resulting in a consensus view of Moderate Buy with an average target near $58.60.