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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: Q4 Fiscal Year 2025
Bank of America reported total revenue of $28.4 billion for the fourth quarter, marking a 7.0% increase year-over-year. Diluted earnings per share (EPS) reached $0.98, surpassing analyst expectations and representing an 18.0% improvement compared to the same period in 2024. These results were primarily driven by a 10.0% surge in net interest income to $15.8 billion and resilient performance in global markets and investment banking. Full-year 2025 net income totaled $30.5 billion, a 13.0% rise, supported by strong loan growth and improved operating leverage across all major business segments.
Note: Bank of America's FY'25 ended on Dec 31, 2025. Q4 FY'25 ended on Dec 31, 2025.
Record-Breaking AI and Digital Engagement
In early March 2026, Bank of America announced that its digital client interactions reached a record 30 billion in 2025, a 14.0% increase year-over-year. This surge was propelled by the bank's AI-powered virtual assistant, Erica, which has surpassed 3.2 billion total interactions since its launch. The bank's strategic pivot toward "high-tech and high-touch" banking is evidenced by 59 million verified digital users and $1.2 trillion in mobile payment approvals via CashPro. This digital scale is significantly lowering the bank's cost-to-serve while deepening relationships through personalized financial planning tools like Life Plan, which has seen 21.5 million frameworks created.
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:
Consumer Banking
- Net Interest Income (NII): Management projects NII growth of 5.0% to 7.0% for 2026, driven by the repricing of fixed-rate assets and mid-single-digit loan growth. This provides potential upside to the Trefis estimate if interest rates remain higher for longer, though aggressive Fed cuts in late 2026 could create a downside scenario by squeezing spreads faster than deposit costs can be adjusted.
- Efficiency Ratio: The bank achieved an efficiency ratio of 61.0% in Q4 2025. Continued AI-driven automation and the reduction of branch overhead present an opportunity to drive this metric toward a 60.0% target. Surpassing this efficiency threshold would lead to significant margin expansion beyond current valuation models.
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 operates as a leading financial institution serving individuals, small and middle-market businesses, and large corporations with a full range of banking, investing, and asset management products. Its diversified model balances interest-sensitive retail banking with fee-driven wealth management and capital markets operations, leveraging a massive $2.02 trillion deposit base to fund lending and investment activities.
SOURCES OF VALUE
The Consumer Banking segment is the cornerstone of Bank of America's valuation, consistently delivering high returns on allocated capital through its scale and low-cost funding advantage.
Retail Deposit Dominance
Bank of America holds a leading market share in U.S. consumer deposits, which reached $2.02 trillion at the end of 2025. This granular, low-cost funding base provides a significant competitive moat against digital-only banks and smaller regionals, particularly in volatile interest rate environments.
Wealth Management Integration
With $4.8 trillion in client balances, the Global Wealth and Investment Management division (Merrill and the Private Bank) provides a resilient stream of fee-based income. The high level of digital activity (86.0%) among wealth clients allows the bank to scale advisory services efficiently while maintaining a premium market position.
KEY TRENDS
Generative AI and Operational Excellence
AIG is utilizing AI techniques to reduce product development cycles and automate back-office workflows, reportedly saving approximately 2,000 headcount positions in certain streams. This shift toward technological coding efficiency and automated customer service is a primary driver for the bank's 2026 goal of maintaining positive operating leverage.
Capital Allocation and Shareholder Returns
Bank of America recently authorized a $40 billion share repurchase plan, intending to buy back approximately $4.5 billion worth of shares every quarter. This aggressive capital return strategy, combined with an 8.0% dividend hike in 2025 to $0.28 per share, underscores management's confidence in the bank's "fortress" balance sheet and organic capital generation.
Normalization of Investment Banking Fees
After a multi-year slump, investment banking fees surged in late 2025, with second-half fees 25.0% greater than the first half. The bank is well-positioned to benefit from a recovering global M&A and IPO pipeline in 2026, which acts as a major non-interest revenue tailwind.
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.