Analyst ratings, an invaluable guide
Picking a stock with substantial return potential can be very difficult since it requires proper research to evaluate a company that is fundamentally strong, has a decent valuation, and is surrounded by macroeconomic and industry factors that may impact it. The process is very time-consuming, and analysts’ ratings can thus act as a valuable guide for decision-making.
Analysts’ ratings are backed by sound logic. Analysts do extensive research by attending the company’s conference calls and other calls as well as scrutinizing the publicly available financial documents. Additionally, the target prices provided by analysts factor in valuations.
According to Wall Street ratings, Bank of America (BAC) could be an intriguing choice for investors right now. Analysts covering the stock are expecting a massive upside in the price.
As of August 23, 21 of the 29 analysts covering Bank of America stock have recommended a “strong buy” or “buy,” while the remaining eight have rated it a “hold.” None of them have given it a bearish rating. With Wall Street’s one-year forward price target of $34.57, the stock has an upside of ~11.6% from its current market price of $30.98.
Peer ratings and target prices
An improving economy, as indicated by GDP growth and low unemployment rates, along with the Fed’s hawkish monetary policies, lower tax rates, and easing regulations, have made analysts bullish about the entire banking industry. Analysts have provided a “buy” recommendation for the majority of Bank of America’s competitors.
One-year target prices for peers JPMorgan Chase (JPM), Wells Fargo (WFC), and Goldman Sachs (GS) signify upsides of 6%, 4.8%, and 15.4%, respectively, from their current market prices. Bank of America makes up ~8.2% of the Invesco KBW Bank ETF (KBWB).