Bank of America Corporation (BAC) Stock Valuation — PE Analysis
Banks - Diversified · NYSE
Current Price
$56.02
PE Ratio (TTM)
12.8x
Intrinsic Value
$101.09
+44.6% margin of safety
COMPETITIVE MOAT
↑Dominant Deposit Base
Bank of America's vast and sticky deposit base provides a stable, low-cost funding source. This scale is difficult for competitors to replicate, offering a significant advantage in a capital-intensive industry.
↑Extensive Branch Network
A widespread physical branch network, particularly in key markets, fosters customer loyalty and trust. This accessibility remains a differentiator, especially for less digitally-inclined customer segments.
↑Cross-Border Payments Expansion
The expansion of its cross-border payments capabilities strengthens transaction banking relationships. This initiative enhances its ability to capture fee income and deepen client engagement in global commerce.
INVESTMENT RISKS
↓Regulatory Scrutiny
As a large, diversified bank, Bank of America faces intense regulatory oversight. Changes in monetary policy or new regulations could impact profitability and operational flexibility.
↓Competition from Fintech
The rise of tokenized deposits and other fintech innovations poses a threat to traditional banking models. Bank of America must continuously adapt to maintain its competitive edge against agile disruptors.
↓Interest Rate Sensitivity
The bank's profitability is sensitive to fluctuations in interest rates. A prolonged period of low rates could compress net interest margins, while rapid increases may impact loan demand and asset values.
Base case
BAC base case PE valuation
A base case PE valuation for BAC estimates a fair value of about $101.09 per share, against a current price of $56.02. The model assumes 16.3% annual earnings growth, a 13x target PE multiple, and a 10% discount rate.
Intrinsic Value
$101.09
Margin of safety
+44.6%
Expected annual return
+12.5%
Base case assumptions: 16.3% annual earnings growth, 13x target PE, 10% discount rate, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the BAC PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Bank of America Corporation respond.
Open PE Calculator for BACCompany Overview
Operating globally through its various subsidiaries, Bank of America Corporation offers a comprehensive range of banking and financial products and services. Its extensive clientele includes individual consumers, small and mid-market businesses, institutional investors, large corporations, and government bodies worldwide. The Consumer Banking division provides diverse options such as traditional and money market savings accounts, certificates of deposit, individual retirement accounts (IRAs), and both interest-bearing and non-interest-bearing checking accounts, in addition to investment products. This segment also issues credit and debit cards, originates residential mortgages and home equity loans, and offers direct and indirect financing for needs like automotive purchases, recreational vehicles, and personal loans. Within its Global Wealth & Investment Management segment, the company delivers investment management, brokerage, banking, and trust and retirement solutions. It also crafts tailored wealth management strategies, including specialized asset management services. The Global Banking segment furnishes a broad spectrum of lending products, including commercial loans, leases, commitment facilities, trade finance, and both commercial real estate and asset-based lending. Furthermore, it provides treasury solutions such as cash management, foreign exchange, short-term investment options, and merchant services, alongside working capital management guidance. This segment also engages in debt and equity underwriting, distribution, and advisory services related to mergers and acquisitions. Through its Global Markets segment, Bank of America performs market-making activities, offers financing, and provides securities clearing, settlement, and custody services. It also devises risk management products employing interest rate, equity, credit, currency, and commodity derivatives, as well as foreign exchange, fixed-income, and mortgage-related instruments. As of December 31, 2021, the corporation served approximately 67 million consumer and small business clients. Its widespread infrastructure comprised around 4,200 retail financial centers and approximately 16,000 ATMs, supplemented by digital banking platforms utilized by roughly 41 million active users. Founded in 1784, Bank of America is headquartered in Charlotte, North Carolina.
Financial Metrics — BAC PE Stock Valuation Data
PE Ratio (TTM)
12.8x
PEG Ratio
0.62
Earnings Yield
7.80%
ROE (TTM)
10.5%
Revenue/Share (TTM)
$24.10
Dividend Yield
2.00%
Debt/Equity
1.28x
Frequently Asked Questions
What is the PE ratio of BAC?
The trailing twelve-month PE ratio of BAC reflects how much investors pay per dollar of Bank of America Corporation's earnings. This metric is most useful when compared to Banks - Diversified peers and the company's own historical range.
Is BAC overvalued based on PE ratio?
BAC's PE of 12.8x combined with a PEG ratio of 0.62 provides a growth-adjusted perspective. A PEG below 1.0 suggests BAC may be undervalued relative to its earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Banks - Diversified, a DCF analysis may be more appropriate.
How do I value BAC stock using PE ratio?
To value Bank of America Corporation using PE: (1) Compare the current PE (12.8x) against the Banks - Diversified median to assess relative pricing, (2) check the PEG ratio (0.62) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of BAC?
BAC's PEG ratio is 0.62, calculated by dividing the PE ratio (12.8x) by the expected earnings growth rate. A PEG below 1.0 is traditionally considered a sign of undervaluation — the market may not be fully pricing in the growth potential. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for BAC stock valuation?
PE ratio gives a quick relative read — how BAC is priced versus Banks - Diversified peers. DCF provides an absolute value based on projected free cash flows. For the most reliable valuation, use PE as a quick comparability screen and DCF for a deeper fundamental analysis. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See BAC DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Financial Services valuationsP/E and DCF value BAC with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.