Highly Regarded

Is Bank of America Corporation (BAC) Stock Undervalued or Overvalued?

Trailing-twelve-month multiples vs Financials sector peers in our coverage

36% Discount TTM fundamentals · sector averages from covered peers

BAC trades at 16.7× TTM earnings — a 36% discount to its Financials sector average of 26.2× in our coverage.

The Numbers

P/E (TTM)

16.7×

Sector avg: 26.2×

P/S (TTM)

4.1×

Sector avg: 9.1×

Market Cap

$441.84B

EPS (TTM): $3.66

Revenue (TTM)

$107.26B

Net income: $29.65B

Financials Peer Comparison

How BAC's multiples stack up against sector peers we cover. Click any peer for its own valuation breakdown.

Stock Price P/E (TTM)
BAC This page $61.26 16.7×
BRK.B $490.86 —
V $358.55 —
MA $543.52 34.8×
MS $215.49 22.1×
GS $1065.59 21.6×

Is the Discount Justified?

July 12, 2026

Bank of America Corporation's P/E ratio of 16.3x is below the Financials sector average of 23.5x. This discount may reflect broader market sentiment regarding the banking sector, which can be sensitive to macroeconomic conditions and interest rate fluctuations. While Bank of America is a well-established financial institution with a diversified business model, including consumer banking, global wealth and investment management, and global banking and markets, concerns about potential net interest margin compression in a changing rate environment or slower loan growth could pressure its valuation. Despite its strong market position and efforts to manage risk and efficiency, the market may be pricing in a more cautious outlook for the financial sector compared to other industries, contributing to its P/E trading at a discount to the sector average.

Sources

Frequently Asked Questions

Is BAC overvalued or undervalued?
On trailing-twelve-month earnings, BAC trades at 16.7x versus a Financials sector average of 26.2x in our coverage — a 36% discount. Whether that's justified depends on growth, margins, and risk; see the context above.
What does the P/E ratio tell you?
Price-to-earnings compares a company's share price with its per-share profits. A higher multiple means investors pay more per dollar of earnings — often for faster expected growth — while a lower one can signal slower growth or higher perceived risk.
Why compare against the sector average?
Valuation multiples vary structurally between industries — software typically trades richer than banks or energy. Comparing BAC with its own Financials peers is more informative than comparing against the whole market.
Is a cheap stock automatically a good buy?
No. A discount can be justified by weak growth or elevated risk (a "value trap"), and a premium can be earned by quality and consistency. Valuation is one input — pair it with the fundamentals and the AI context on this page.

Methodology

Multiples are computed from trailing-twelve-month fundamentals (from company filings) and the latest share price: P/E is price ÷ diluted EPS, and P/S is market cap ÷ revenue. Sector averages use the Financials names in our 50-stock coverage with positive earnings — a deliberately like-for-like, if imperfect, benchmark.

Stocks with negative trailing earnings are compared on price-to-sales instead. Multiples update with prices and fundamentals; AI context refreshes weekly.

Not Financial Advice

This page is for education and information only. Indicators are mechanical calculations, AI commentary can contain errors, and nothing here is a recommendation to buy or sell any security. Do your own research and consider consulting a qualified financial advisor. See our full disclaimer.

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V JPM BRK.B MA MS GS