Bank of America (BAC) Stock Still Looks Cheap Following Its 111% Run

Yahoo Finance ·

Bank of America (BAC) Stock Still Looks Cheap Following Its 111% Run Bailey Pemberton Wed, July 15, 2026 at 6:09 PM EDT 5 min read BAC Find your next quality investment with Simply Wall St's easy and powerful screener, trusted by over 7 million individual investors worldwide. Bank of America stock has delivered a 110.6% total return over the past three years, and the current valuation checks suggest there may still be upside, with both the intrinsic value estimate from the Excess Returns model and earnings multiples pointing in the same direction while the broader scorecard remains only mixed. A 110.6% return over three years puts Bank of America firmly in the winner's circle. The key issue now is whether the current price already reflects that strength. Strong recent earnings momentum, particularly in trading and investment banking tied to capital markets and AI related financing, can support the cash flows behind today's valuation, while exposure to credit quality and the interest rate backdrop remains a central risk. The stock screens as undervalued on both the Excess Returns intrinsic value estimate and key market multiples. However, a value score of 3/6 points to a mixed picture rather than an obvious bargain or clear overvaluation. The issue now is whether Bank of America's recent rally still leaves enough valuation cushion for new money going in at today's price. Bank of America delivered 36.7% returns over the last year. See how this stacks up to the rest of the Banks industry. The Excess Returns model looks at how efficiently Bank of America converts its equity base into earnings above its cost of capital. On this view, the stock's value is driven less by headline growth stories and more by what it earns on every dollar of book value. For Bank of America, the model uses a Book Value of $39.34 per share and a Stable EPS of $5.40 per share, based on weighted future Return on Equity estimates from 14 analysts. With an Average Return on Equity of 12.46% versus a Cost of Equity of $3.78 per share, the bank is assumed to generate an Excess Return of $1.62 per share on a Stable Book Value that trends toward $43.31 per share. Feeding these inputs into the Excess Returns framework gives an estimated intrinsic value of $74.51 per share, which sits above the current market price and implies the stock is about 17.3% undervalued. Because recent Q2 2026 results highlighted strong earnings and high returns on equity, the market's pricing below the Excess Returns estimate suggests investors are still applying a meaningful caution discount to Bank of America stock. On this Excess Returns view, Bank of America stock currently appears undervalued relative to its implied intrinsic worth. Our Excess Returns analysis suggests Bank of America is undervalued by 17.3%. Track this in your watchlist or portfolio , or discover 47 more high quality undervalued stocks . Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Bank of America. The P/E ratio suits Bank of America because earnings power is central to how investors usually look at large banks. Bank of America trades on roughly 13.5x earnings, which sits slightly below the peer average of about 13.9x and modestly above the broader Banks industry average of 12.2x. That puts the stock close to the sector pack, without a large premium or discount on simple comparisons. The tailored fair P/E ratio for Bank of America is 15.8x, reflecting what investors might pay given its size, profitability profile, and sector risks. Set against the current 13.5x, this suggests the stock trades at a discount to where that framework would place it, even after recent earnings results and a rally in large U.S. bank stocks. For investors who emphasize this earnings-based check, Bank of America screens as cheaper than the model indicates. On the P/E multiple, Bank of America stock appears undervalued relative to its modelled fair earnings ratio. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives pick up where Bank of America's valuation puzzle leaves off by spelling out which paths for growth, margins and earnings would need to play out for the stock to be worth materially more or less than today's price on the Community page. Each Narrative treats fair value as a specific thesis about Bank of America's business that can be tracked over time, rather than a one off snapshot, so you can see how the story holds up. Be one of the first voices in the Simply Wall St community to put a clear, number driven Narrative on Bank of America stock. Lay out whether record trading, investment banking strength and AI related financing ultimately support today's price. Share your thesis now so you can track how it holds up as fresh earnings, capital returns and balance sheet data come through. Do you think there's more to the story for Bank of America? Head over to our Community to see what others are saying! For Bank of America, both the Excess Returns intrinsic value estimate and the earnings multiple work in the same direction, pointing to an undervalued stock rather than one priced for perfection. At the same time, the mixed broader scorecard keeps this from being a one way valuation story. The real hinge from here is whether earnings and returns on equity remain strong enough, relative to credit and interest rate risks, for that valuation gap to close instead of turning into a value trap. 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. Companies discussed in this article include BAC . Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

DYAX Investor Sentiment

Bullish (Long) 48% · Bearish (Short) 52%

460 participants

Related News

원문 보기 — Yahoo Finance