Highly Regarded

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

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

44% Discount TTM fundamentals · sector averages from covered peers

BAC trades at 14.1× TTM earnings — a 44% discount to its Financials sector average of 25.4× in our coverage.

The Numbers

P/E (TTM)

14.1×

Sector avg: 25.4×

P/S (TTM)

3.5×

Sector avg: 9.6×

Market Cap

$373.17B

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 $51.74 14.1×
BRK.B $525.88 —
V $399.62 —
MA $616.27 39.4×
MS $182.10 18.7×
GS $891.33 18.1×

Is the Discount Justified?

October 4, 2026

Bank of America Corporation trades at a P/E of 14.7x, a discount to its Financials sector average of 22.0x. The bank is poised for strong Q3 2026 results, with analysts expecting double-digit year-over-year growth in revenue (11%), net income (17%), and EPS (23%). This performance is supported by robust Net Interest Income (NII) growth, guided to the top end of 6-8% for the full year 2026, and strong contributions from fee-based businesses like investment banking and wealth management. The company is also demonstrating operational efficiency through AI-driven productivity, leading to a reduction in headcount. The current valuation may reflect broader macroeconomic uncertainties or a market expectation of normalization in fee income after an exceptional Q2.

Sources

Frequently Asked Questions

Is BAC overvalued or undervalued?
On trailing-twelve-month earnings, BAC trades at 14.1x versus a Financials sector average of 25.4x in our coverage — a 44.3% 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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Same question, Financials peers

GS V MA BRK.B MS JPM