10 Undervalued Wide Moat Stocks to Buy According to Analysts

7) Bank of America Corporation (NYSE:BAC)

Average Upside Potential: 16.76%

Forward P/E Ratio (As of September 25): 10.91x

Bank of America Corporation (NYSE:BAC) offers banking and financial products and services for individual consumers, small and middle-market businesses, institutional investors, large corporations, and governments.

Bank of America Corporation (NYSE:BAC) has a wide economic moat based on its cost advantages, switching costs, and brand value. The company also enjoys a strong nationwide scale. The banking giant continues to focus on improving NIM by paying down higher-cost liabilities. Bank of America Corporation (NYSE:BAC) is focused on organic growth with the help of strategic investments in its core businesses. Wall Street expects that the banking company’s revenue should be aided by growth in customer numbers and activity throughout its business segments.

Bank of America Corporation (NYSE:BAC)’s investment banking and capital markets division should continue to exhibit strong performance amidst challenging market conditions. This further solidifies its competitive advantage. With the stabilization of interest rates, the company appears to be well-positioned to benefit from improved operational efficiencies, a healthy balance sheet, and higher lending activity.

In Q2 2024, Bank of America Corporation (NYSE:BAC) saw revenue, net of interest expense, coming at $25.4 billion, rising $180 million, or 1%. This reflects increased asset management and investment banking fees, sales and trading revenue, and lower net interest income. The strength and earnings power of the company’s leading Consumer Banking business was complemented by its growth and profitability of Global Markets, Global Banking, and Wealth Management businesses.

Barclays increased its target price on shares of Bank of America Corporation (NYSE:BAC) from $43.00 to $49.00, giving an “Overweight” rating on 17^th July. According to Insider Monkey’s Q2 2024 data, 92 hedge funds held stakes in the company.

ClearBridge Investments, an investment management company, released its first quarter 2024 investor letter. Here is what the fund said:

“We added several new positions during the quarter. Our largest new addition was Bank of America Corporation (NYSE:BAC), one of the world’s leading financial institutions, serving some 66 million consumer and small business clients across the U.S. as well as large corporations, financial institutions and governments globally. We believe that the interest rate pressure that Bank of America faced in early 2023 has subsided, and risks surrounding deposit outflows have abated, which should allow the company to improve its book value and capital growth as well as benefit from a rebound of capital markets activity.”