Bank of America Corp.

Analyst thesis

Our recommendation is based on:

• Diversified earnings base: Bank of America Corp’s (BAC) diversified earnings base across retail banking, wealth management, corporate banking, and capital markets activities enhances earnings resilience and reduces dependence on any single revenue stream. Its scale provides funding advantages through a large, low-cost deposit base, while the breadth of customer relationships supports cross-selling and recurring fee income. This diversification helps support more stable profitability and returns for BAC across economic cycles.

• Supportive operating environment: BAC benefits from a resilient US operating environment, supported by stable labour markets, moderating inflation and still-elevated interest rates, underpinning net interest income (NII), credit demand, and client activity. Structural growth in digital banking, payments and wealth management remains supportive. However, moderating GDP growth, higher funding costs, competitive pressures, and regulatory uncertainty continue to constrain growth prospects.

• Strong capital position and resilient profitability: BAC continues to deliver solid returns, supported by disciplined risk management, operating leverage and a large, diversified deposit franchise. Capital and liquidity levels remain strong, supporting sustainable dividends, share buybacks, and continued investment in technology, digital capabilities and franchise expansion.

• Price aligned with value: BAC currently trades broadly in line with our intrinsic value (IV), suggesting that resilient earnings, balance sheet strength and the medium-term operating outlook are largely reflected in the share price.