Bank of America Corporation logo BAC-PL - Bank of America Corporation

Price: -- -- | CONSENSUS: Buy DETAILS
STRONG
BUY 0
BUY 19
HOLD 18
SELL 2
STRONG
SELL 0
AlphaVal

AlphaVal

Deterministic, archetype-aware fair value

Banks, Insurers & Asset Managers 85% confidence

Primary model: P/Tangible Book × ROE Quality

Valuation Signal Overvalued Strong
Trading 50.9% above fair value
Current Price $1290.78
Bear Case $546.79 57.6% downside ($546.79 - $1,290.78) / $1,290.78 = -57.6% ROTCE 9.8% → 0.85x TBV
Fair Value $855.42 33.7% downside ($855.42 - $1,290.78) / $1,290.78 = -33.7% ROTCE 13.0% → 1.33x TBV
Bull Case $1,040.60 19.4% downside ($1,040.60 - $1,290.78) / $1,290.78 = -19.4% ROTCE 15.0% → 1.62x TBV

Adjust Assumptions

13.0%
10.8%

Key Value Driver

ROTCE (13.0%) vs. cost of equity (10.8%)

Implied Market Multiple 2.01x

Plain-Language Summary

With ROTCE of 13.0% vs. 10.8% cost of equity, fair P/TBV is 1.33x on $640.92 tangible book, implying $855.42 per share.

Warnings

⚠ Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
⚠ Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.

Key Risks

  • Book value quality matters as much as level — check loan loss reserves
  • Interest rate sensitivity creates non-linear earnings surprises
  • Insurance reserving is actuarial, not financial — errors emerge slowly