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How do I use this slideshow?
1. The slideshow contains the most important forecasts for a company's divisions, or product lines.
2. Disagree with a forecast? Simply drag the trend-line to test your own what-if scenario, and see possible upside or downside risks for a stock.
3. Plot data for competitors and benchmarks using the "Competition" button.
4. In the slide caption, and the area below the slideshow, see the key trends impacting a given forecast, as well as historical explanations.
5. The first slide shows which one of a company's divisions, or product lines, contribute most to its stock price. Clicking on a division arm of the diagram, you can explore the most important forecasts for the division. -
How do we get the historical numbers for this chart?
Trefis has a team of in-house Analysts who gather historical data from company filings and other verifiable sources. The data and sources are available on the Trefis website.
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Who came up with the Trefis forecast for future years?
The Trefis team of in-house Analysts considers a variety of factors when projecting any forecast, and their rationale is explained on the Trefis website.
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How does my dragging the trendline on the chart impact the stock price?
1. We use forecasts for various business drivers to calculate forecasted Revenues and Profits for .
2. We then use forecasted Profits in a Discounted Cash Flow (DCF) model to obtain the Price Estimate for . -
How does Trefis come up with the Price estimate for a company?
The Trefis forecasts are used to calculate future revenues, costs and cash profits for . The future cash profits are then discounted to the present to arrive at the total value of . The total value divided by number of shares outstanding is the Price estimate.
VALUATION HIGHLIGHTS
- Consumer Banking constitutes 39% of the Trefis price estimate for Bank of America's stock.
- Corporate & Commercial Banking constitutes 22% of the Trefis price estimate for Bank of America's stock.
- Wealth Management constitutes 17% of the Trefis price estimate for Bank of America's stock.
WHAT HAS CHANGED?
Latest Earnings: Q1 Fiscal Year 2026
Bank of America reported total revenue of 26.2 billion dollars for the first quarter of 2026, a 1.5% increase compared to the prior year. Net income reached 7.1 billion dollars with diluted EPS of 0.86 dollars, up from 0.83 dollars in Q1 2025. Revenue growth was primarily supported by strong investment banking fees and sales and trading revenue, which helped offset a slight year-over-year decline in net interest income as funding costs remained elevated despite stable loan yields.
Note: Bank of America's FY'25 ended on December 31, 2025. Q1 FY'26 ended on March 31, 2026.
Expansion of Erica and Digital Wealth Integration
The bank continues to scale its AI-driven virtual assistant, Erica, which surpassed 2 billion client interactions this quarter. Bank of America is strategically pivoting to integrate these digital tools deeper into Merrill Lynch and Private Bank workflows to drive personalized wealth management at scale. This shift is designed to capture a larger share of the mass-affluent market while lowering the marginal cost of service through automation and self-service capabilities.
POTENTIAL UPSIDE & DOWNSIDE TO TREFIS PRICE
Below are key drivers of Bank of America's value that present opportunities for upside or downside to the current Trefis price estimate:
Global Banking and Markets
- Investment Banking Fee Momentum: Investment banking fees surged 35% to 1.6 billion dollars, significantly outpacing the Trefis conservative growth estimate. If the current M&A and equity underwriting recovery persists through 2026, it could lead to a 7% upside in the segment's valuation.
- Sales and Trading Performance: Equities and FICC trading revenue reached 5.2 billion dollars, driven by market volatility and strong client activity. A sustained higher-for-longer rate environment that fuels continued hedging activity would present a bull-case scenario for non-interest income.
For additional details, select a division from the interactive Trefis split for Bank of America at the top of the page.
BUSINESS SUMMARY
Bank of America is one of the world's largest financial institutions, serving individuals, small and middle-market businesses, and large corporations with a full range of banking, investing, asset management, and other financial and risk management products and services.
SOURCES OF VALUE
The company's primary value is derived from its massive consumer deposit base and its leading position in global investment banking and wealth management.
Massive Low-Cost Deposit Base
With over 1.9 trillion dollars in total deposits, Bank of America benefits from a massive pool of liquidity that provides a significant funding advantage over smaller competitors. Its high proportion of non-interest-bearing consumer deposits allows for higher net interest margins during periods of elevated interest rates.
Market Leadership in Wealth Management
The combination of Merrill Lynch and the Private Bank makes Bank of America a global leader in wealth management. This segment provides a stable, recurring fee-based revenue stream that is less capital-intensive than traditional lending, supporting high returns on equity across market cycles.
KEY TRENDS
Higher-for-Longer Interest Rate Environment
As the Federal Reserve maintains rates at elevated levels to combat persistent inflation, Bank of America is navigating a "trough" in net interest income. The company expects NII to begin increasing in the latter half of 2026 as fixed-rate assets reprice higher and deposit betas stabilize, positioning the bank for long-term margin expansion.
Operational Efficiency Through Digital Transformation
Bank of America is aggressively reducing its physical footprint in favor of digital channels. Over 54% of its sales are now digitally initiated. This strategy is aimed at maintaining a sub-60% efficiency ratio by offsetting rising labor costs with technological efficiencies in retail and commercial banking operations.
Credit Normalization in Consumer Portfolios
Credit card and auto loan delinquencies are returning to historical norms following pandemic-era lows. The bank has increased its provision for credit losses to 1.3 billion dollars this quarter, reflecting a prudent approach to reserve building as consumer balance sheets face pressure from sustained high borrowing costs.
Methodology
Trefis analyzes how a company's products impact its stock price. Using mathematical models to forecast a company's future revenues, costs and cash profits then discounting them to the present, Trefis comes up with a Trefis Price. The Trefis Price is an estimate of the fair or intrinsic value of the company's present stock price.
The selection process
The Trefis tool currently covers 200+ symbols. In building its coverage Trefis selected companies using the following criteria:
- Companies with high interest among retail investors were more likely to be selected. Interest among retail investors was judged by percentage of retail ownership, overall volume of news flow, as-well-as general awareness in the marketplace.
- Market cap/size: Larger cap companies are more popular and cater to the interests of a larger set of investors/finance site visitors, and as-such were more likely to be selected.
- Sector-wise coverage build-out: Trefis also selected to cover companies in the same market, at the same time. For example, when Trefis started covering Apple, covering other companies like Hewlett Packard and Dell in the mobile, and notebooks/desktop markets was a natural next step.
Trefis initially started out covering companies in technology, media and telecom sectors. Since then it has expanded coverage to consumer, automotive, financial services and energy. Trefis is currently building out more coverage within industrials and will be moving into health care over the next year. Trefis also builds out coverage selectively on smaller companies that have high growth potential as well as companies that are in the process of going public and attract interest from finance site visitors and investors.
Trefis does not favor any companies, except follow the selection mechanism outlined above to guide its judgment.
The Trefis tool limitations:
- The Trefis price estimate may not converge with market price: The Trefis price estimate is an estimate of the intrinsic value of a company; just like a price estimate that any other Wall Street firm might come up with. Trefis understands that multiple factors, some quantifiable, and some not so easily tackled, influence a company's stock price. Though the Trefis view is a very detailed fundamental model of the business, it is still just a model - an artificial representation of the real company, which is much more complex.
- No user modification of structure: While Trefis allows users to modify forecasts for any of the drivers in its analysis of a company; it currently does not allow users to change the structure by adding or removing drivers or divisions.
The Trefis Tool Key assumptions
- The Trefis price includes forecasts of a company's fundamental drivers (examples: pricing, units, market share of a company's product lines), which are then factored into the Trefis price estimate for the company's stock.
- In addition, Trefis discounts a company's cash flows at a company-specific discount rate. Cash flows beyond the explicit forecast period are accounted for using a terminal growth rate.
IMPORTANT: The projections or other information generated by the Trefis price estimate tool regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. Results will vary with each use and over time.