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Bank of America Beats Earnings Expectations But Shares Slide Anyway

MarketDash Editorial Team
6 hours ago
Bank of America delivered fourth-quarter results that topped Wall Street forecasts, with net income hitting $7.6 billion and earnings per share of 98 cents. Despite the strong performance, shares tumbled as investors digested the results.

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Bank of America Corp (BAC) shares took a dive Wednesday despite delivering fourth-quarter results that handily beat Wall Street's expectations. It's one of those classic "good news, bad reaction" moments that makes you wonder what investors were really hoping for.

The Numbers Tell a Strong Story

The bank posted net income of $7.6 billion for the quarter, up from $6.80 billion a year earlier. Earnings per share came in at 98 cents, topping the analyst consensus of 96 cents. Revenue climbed 7% year-over-year to $28.532 billion, cruising past the Street's estimate of $27.944 billion.

Looking ahead, Bank of America expects net interest income to grow between 5% and 7% in 2026, with first-quarter growth projected around 7% year-over-year. That's the kind of forward guidance that usually gets investors excited.

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Wall Street's Take

Goldman Sachs analyst Richard Ramsden seemed genuinely impressed, noting that core pre-provision net revenue hit $11.1 billion—a whopping 14% above Goldman's own estimates and 9% above the broader Street consensus. The beat was powered by slightly better net interest income, stronger core fees, and improved operating efficiency.

Ramsden pointed out that core return on tangible common equity reached 14.4%, roughly 75 basis points above what analysts were expecting. That's a meaningful outperformance on a key profitability metric.

But even enthusiastic analysts have questions. Ramsden wants more clarity on what's driving that optimistic 2026 net interest income outlook, especially given that balance sheet growth slowed a bit during the quarter even as net interest margin trends looked robust. He's also watching capital returns closely—the bank bought back $6.3 billion in shares this quarter—and wondering how upcoming capital reforms might affect future buyback capacity.

Other items on the analyst watch list: whether trading revenue can sustain its 10% year-over-year bump from Q4, how quickly investment banking continues improving, and when credit normalization and reserve builds might materialize.

Ramsden maintains a Buy rating on Bank of America with a price target of $64.

Price Action: BAC shares were down 4.97% at $51.85 Wednesday afternoon, making it one of the day's weakest performers despite the earnings beat.

Bank of America Beats Earnings Expectations But Shares Slide Anyway

MarketDash Editorial Team
6 hours ago
Bank of America delivered fourth-quarter results that topped Wall Street forecasts, with net income hitting $7.6 billion and earnings per share of 98 cents. Despite the strong performance, shares tumbled as investors digested the results.

Get Bank Of America Alerts

Weekly insights + SMS alerts

Bank of America Corp (BAC) shares took a dive Wednesday despite delivering fourth-quarter results that handily beat Wall Street's expectations. It's one of those classic "good news, bad reaction" moments that makes you wonder what investors were really hoping for.

The Numbers Tell a Strong Story

The bank posted net income of $7.6 billion for the quarter, up from $6.80 billion a year earlier. Earnings per share came in at 98 cents, topping the analyst consensus of 96 cents. Revenue climbed 7% year-over-year to $28.532 billion, cruising past the Street's estimate of $27.944 billion.

Looking ahead, Bank of America expects net interest income to grow between 5% and 7% in 2026, with first-quarter growth projected around 7% year-over-year. That's the kind of forward guidance that usually gets investors excited.

Get Bank Of America Alerts

Weekly insights + SMS (optional)

Wall Street's Take

Goldman Sachs analyst Richard Ramsden seemed genuinely impressed, noting that core pre-provision net revenue hit $11.1 billion—a whopping 14% above Goldman's own estimates and 9% above the broader Street consensus. The beat was powered by slightly better net interest income, stronger core fees, and improved operating efficiency.

Ramsden pointed out that core return on tangible common equity reached 14.4%, roughly 75 basis points above what analysts were expecting. That's a meaningful outperformance on a key profitability metric.

But even enthusiastic analysts have questions. Ramsden wants more clarity on what's driving that optimistic 2026 net interest income outlook, especially given that balance sheet growth slowed a bit during the quarter even as net interest margin trends looked robust. He's also watching capital returns closely—the bank bought back $6.3 billion in shares this quarter—and wondering how upcoming capital reforms might affect future buyback capacity.

Other items on the analyst watch list: whether trading revenue can sustain its 10% year-over-year bump from Q4, how quickly investment banking continues improving, and when credit normalization and reserve builds might materialize.

Ramsden maintains a Buy rating on Bank of America with a price target of $64.

Price Action: BAC shares were down 4.97% at $51.85 Wednesday afternoon, making it one of the day's weakest performers despite the earnings beat.