BAC
The bank just flexed
Bank of America had a pretty solid Wednesday: shares were up after the company rolled out record second-quarter results, and RBC Capital Markets took the “well, that’s impressive” route by lifting its price target to $65 from $59 while keeping an Outperform rating.
The key message from the analyst note? BofA’s low-cost deposit base is still doing a lot of heavy lifting, and a steeper yield curve could give the bank even more room to make money over the next 12 months. Translation: the plumbing of the business looks strong, and that tends to matter a lot when you’re a bank.
Why investors care
The quarter wasn’t just a one-hit wonder. RBC pointed to:
- 15% revenue growth, led by broad-based strength
- Net income up 27% to $9.1 billion
- Diluted earnings per share up 34% to $1.21
- Double-digit net income growth across every major segment
That kind of broad-based gain is what makes investors sit up a little straighter. It’s not just one flashy division carrying the team like a superstar with a questionable bench.
The fine print that actually matters
BofA’s net interest income rose 9% to $16.0 billion, helped by loan and deposit balances, fixed-rate repricing, and a busy Global Markets business. Meanwhile, credit quality and card delinquencies improved, which is the kind of news that keeps the “is the consumer cracking?” crowd from getting too dramatic.
Big picture: the stock may still be cheap enough to keep analysts interested, but the real story is that Bank of America is showing it can grow, lend, and manage credit without breaking a sweat.