Baird upgrades Bank of America, as this week’s sell-off is a buying opportunity

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Baird upgrades Bank of America, as this week’s sell-off is a buying opportunity

The recent pullback in Bank of America is an opportunity for investors to buy the stock, according to Baird. Analyst David George upgraded shares to outperform from neutral. He also notched his price target $5 higher to $50, implying shares could rise around 20.6% from Thursday’s close. According to George, Bank of America is a “great franchise at [a] reasonable price.” The analyst cited Bank of America’s “best-in-class deposit franchise, consistent execution, relatively low credit risk, and top-tier markets businesses.” Thanks to the stock’s 10.6% sell-off this week, he believes shares are now trading at a more reasonable valuation. Bank of America and other big banking peers have tumbled this week amid a broader market pullback, due to concerns of weaker U.S. economic growth and global transactional activity stemming from tariffs. “BofA is under-earning currently given its below-normal [net interest margin], which should provide a nice tailwind over the coming years, and BAC is well-positioned to return capital given its healthy PPNR profitability and modest balance sheet growth,” George added. BAC 5D mountain BAC in past 5 trading days Most analysts are bullish on the stock, per LSEG. Of the 24 who cover it, 19 have a buy or strong buy rating. In addition to Bank of America, George also raised his rating on JPMorgan Chase to neutral from underperform. JPMorgan shares also slipped nearly 7% week to date. Despite JPMorgan’s “best-in-class franchise” and the stock’s recent decline, the analyst believes shares are still trading at too-high of a valuation. “JPM shares are off ~11% in the last month (vs. SPY -5.5%), and we are having a tough time making the short case in the name after this recent weakness. With the stock still relatively expensive at ~2.55x TBV, we aren’t buyers of the stock but don’t believe it makes sense to be short, as defensive-minded market participants will likely move into JPM if economic data gets a little more volatile,” George noted.

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