2026년 2월 27일 · Unknown · financial · 출처 Yahoo Finance
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If you are wondering whether Bank of America is priced fairly right now, the key question is how its current share price stacks up against different ways of estimating underlying value. The stock last closed at US$52.30, with a 0.9% decline over the past 7 days, a flat 0.2% return over 30 days, and longer term moves of 21.3% over 1 year, 67.9% over 3 years, and 60.9% over 5 years that may catch the eye of investors thinking about growth potential or shifting risk views. Recent headlines around large U.S. banks have focused on topics such as interest rate expectations, credit quality trends, and the regulatory backdrop. All of these can influence how investors think about Bank of America and help explain why some investors are reassessing what they are willing to pay for established financial institutions. On Simply Wall St's valuation checks, Bank of America scores a 3 out of 6. This suggests some measures point to undervaluation while others are more mixed. Next, we will run through the usual valuation approaches before circling back to a broader way of thinking about what the stock might be worth over time.
Bank of America delivered 21.3% returns over the last year. See how this stacks up to the rest of the Banks industry.
Approach 1: Bank of America Excess Returns Analysis
The Excess Returns model looks at how much profit a company is expected to earn above the return that shareholders require, and then capitalizes those “excess” profits into an estimate of value per share.
For Bank of America, the starting point is a Book Value of $38.44 per share and an Average Return on Equity of 11.86%. Analysts’ estimates translate into a Stable EPS of $5.10 per share, based on weighted future Return on Equity estimates from 13 analysts. The model applies a Cost of Equity of $3.88 per share. This implies an Excess Return of $1.23 per share after covering shareholders’ required return.
The Stable Book Value is put at $43.05 per share, again based on analyst estimates for future book value. Combining this book value base with the stream of expected excess returns gives an estimated intrinsic value of about $65.01 per share for Bank of America.
Compared with the recent share price of US$52.30, this Excess Returns valuation suggests the stock is about 19.6% undervalued.
Result: UNDERVALUED
Our Excess Returns analysis suggests Bank of America is undervalued by 19.6%. Track this in your watchlist or portfolio, or discover 54 more high quality undervalued stocks.
Story Continues
BAC Discounted Cash Flow as at Feb 2026
Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Bank of America.
Approach 2: Bank of America Price vs Earnings
For a profitable bank like Bank of America, the P/E ratio is a useful way to think about what you are paying for each dollar of earnings. It links directly to the bottom line, which is what ultimately supports dividends and buybacks.
What counts as a “normal” P/E depends on how quickly earnings are expected to grow and how risky those earnings appear. Higher expected growth or lower perceived risk can justify a higher multiple, while slower growth or higher risk usually calls for a lower one.
Bank of America currently trades on a P/E of 12.98x. That sits above the Banks industry average of 11.75x, but below the peer group average of 13.98x. Simply Wall St’s Fair Ratio for Bank of America is 16.52x, which is its proprietary estimate of what a reasonable P/E might be, given factors such as earnings growth, profit margins, industry, market cap and risk profile.
The Fair Ratio can be more informative than a simple comparison with peers or the industry, because it adjusts for those company specific features rather than assuming one size fits all. With a Fair Ratio of 16.52x versus the current 12.98x, this approach indicates that Bank of America is trading below that modelled “fair” level.
Result: UNDERVALUEDNYSE:BAC P/E Ratio as at Feb 2026
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Upgrade Your Decision Making: Choose your Bank of America Narrative
Earlier we mentioned that there is an even better way to think about valuation. On Simply Wall St you can use Narratives, which are simple stories that express your view on Bank of America. You can link that story to a detailed forecast for revenue, earnings and margins, and turn it into a fair value that you can compare with today’s price. All of this is available inside an accessible tool on the Community page that millions of investors already use. Narratives update automatically as fresh news or earnings arrive. For example, one investor currently sets a fair value of about US$43.34 while another is closer to US$62.52, showing how different views on interest rates, deposit competition or digital growth can translate into very different conclusions about whether the stock looks rich or reasonable at its current level.
For Bank of America, however, we will make it really easy for you with previews of two leading Bank of America Narratives:
🐂 Bank of America Bull Case
Fair value in this narrative: US$62.52 per share
Implied discount to fair value vs last close of US$52.30: about 16.4% undervalued
Assumed annual revenue growth: 6.7%
Focuses on net interest income and expense discipline as key supports for future earnings power, helped by digital engagement, AI and a mix of higher quality loans. Leans on analyst assumptions for revenue growth, profit margins, earnings, share count and discount rate to justify a fair value above both the current price and consensus target. Flags risks around economic volatility, policy uncertainty, litigation costs and deposit competi…