Bank Of America's Run Of Outperformance Fairly Values The Longer-Term Opportunity

 

I liked Bank of America (BAC) ("B of A") back in the summer of 2020, as I thought the market reaction to the near-term pressures on the banking sector were extreme relative to the long-term opportunities for this leading consumer and commercial bank. Since then, the shares have largely outperformed most of the bank's mega-cap peers (Citigroup (C), JPMorgan (JPM)) with a roughly 85% total return, though a few (PNC (PNC) and Wells Fargo (WFC)) have done better.

With the run in the shares, I'd say that the market fairly values the opportunity I see for Bank of America. I do expect the company to leverage its strong franchise, scale, and IT capabilities to continue gaining share in the fragmented U.S. banking market, but I don't see the outsized returns I saw before.

 

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Bank Of America's Run Of Outperformance Fairly Values The Longer-Term Opportunity