TipRanks

Fri, Jun 20, 2025, 6:39 PM4 min read

Bank of America (BAC) is scheduled to report its Q2 2025 earnings on July 16, with analysts forecasting $0.90 per share, reflecting modest 8% year-over-year growth. I believe BAC is well-positioned to beat expectations, supported by conservative loan loss provisioning, ongoing share buybacks, strength in its Global Markets division, and higher net interest income amid slower-than-expected Federal Reserve rate cuts.

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BAC stock currently trades at $45, within striking distance of its all-time high of $47 per share. With resistance clearly set, BAC stock will need a strong catalyst to make further headway beyond $50 per share.

Given the lack of clear catalysts, I remain Neutral on BAC stock. It currently trades at 1.66x tangible book value and 12.6x 2025 earnings—a valuation that’s lower than peers like JPMorgan Chase (JPM), but still richer than that of many U.S. regional banks.

Heading into Q2 2025, Bank of America’s provisioning appears notably conservative. The bank’s macroeconomic outlook assumes an unemployment rate of just below 5% by the end of 2025, remaining at that level through 2026, which is slightly more pessimistic than the Federal Reserve’s projection of 4.5% for both years.

Similarly, Bank of America forecasts 1% GDP growth in Q4 2025, undercutting the Fed’s more optimistic estimate of 1.4%.

In short, Bank of America’s current reserves already reflect a cautious economic view, making it unlikely to build a significant provision in Q2 2025. The bank appears to have already accounted for a moderate economic slowdown later this year and into 2026.

Analysts expect Bank of America to deliver earnings of $0.90/share in Q2 2025, up 8% year-over-year. This would represent a marked slowdown from the 18% annual increase observed in the first quarter of 2025.

I believe the projected 8% EPS growth is overly conservative. Based on my estimates, share repurchases alone could contribute around 5% EPS growth. Additionally, Bank of America is likely to raise its net interest income (NII) guidance, as the Federal Reserve is now expected to deliver only two rate cuts in 2025, compared to the four cuts the bank had initially anticipated in its own outlook.

I also expect slightly stronger performance from the Global Markets division, supported by heightened market volatility early in Q2 2025, which could contribute a paltry $0.02 per share to earnings.