7 Best American Bank Stocks To Buy According to Hedge Funds

2. Bank Of America Corporation (NYSE:BAC)

Number of Hedge Fund Investors: 92

In terms of total assets, Bank Of America Corporation (NYSE:BAC) is now the second-biggest commercial bank in the United States, following the 2008 financial crisis and years of difficulties. The bank is one of the top four credit card issuers and acquirers in the US, has a strong commercial banking franchise, and is a Tier 1 investment bank. It owns the Merrill Lynch franchise, which has developed into one of the top brokerage and consulting businesses in the US and is among the strongest retail branch networks and total retail franchises in the entire country.

Global Banking, Global Markets, Global Wealth & Investment Management (GWIM), and Consumer Banking are BAC’s four primary business segments. By diversifying its business, BAC provides a broad range of banking and nonbank financial services and products while reducing the risk associated with downturns in the market.

Over two billion consumers have benefited from the corporate and individual services provided by the well-known bank’s virtual financial assistant, Erica, since its launch in 2024.

Bank of America Corporation (NYSE:BAC) reported higher-than-expected earnings for the second fiscal quarter of 2024, owing to excellent performance in its investment banking segment as well as solid net interest income. The share price increased by more than 5% YoY as a result of the earnings report, reaching a peak not seen since the start of FY 2022.

ClearBridge Value Equity Strategy stated the following regarding Bank of America Corporation (NYSE:BAC) in its first quarter 2024 investor letter:

“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.”

Though experts believe the company’s growth potential is supported by its excellent revenue from trading and investment banking as well as its positive net interest income estimates, anticipated rate cuts and rising deposit costs could put pressure on future profitability.

BAC is one of the Best Bank Stocks To Buy in 2024 since it has promising growth potential. As seen by 19 analysts, BAC has a consensus Buy rating with an average price target of $42.39 and an upside potential of 5.61% from the current stock price.

Warren Buffett’s Berkshire Hathaway is the largest shareholder in the company, with 1,032,852,006 shares worth $41.08 billion.