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Bank of America Targets Raised After Results Top Estimates

Analysts cite strong revenue from interest on loans in third-quarter earnings for upward revisions.

Several Wall Street analysts raised their price targets for Bank of America  (BAC) - Get Bank of America Corp Report Friday after the financial giant posted better-than-expected third-quarter results boosted by interest revenue.

Analysts at Barclays, Oppenheimer, Evercore ISI and RBC Capital Markets all raised their price targets on the second largest U.S. bank in the wake of the report.

Bank of America posted a 58% rise in third-quarter profit, led by a rebound in revenue from interest on loans and by improving loan growth. Earnings of 85 cents a share topped the consensus estimate of 71 cents a share in a FactSet survey of analysts.

"Bank of America delivered the most impressive earnings print of all the large banks reporting thus far this season," Oppenheimer analyst Chris Kotowski wrote in a note to investors. 

In addition to better-than-expected trading revenue, Kotowski said the lender, unlike others, also beat on really solid growth in "core" net interest income growth. 

Kotowski raised the firm's price target on the stock to $51 from $48 saying he expects incremental upside to the stock in coming quarters as focus shifts to 2023. Oppenheimer has an outperform rating on the stocks.

Evercore ISI analyst Glenn Schorr raised the firm's price target on Bank of America to $48 a share from $43 and maintained an outperform rating on the shares. 

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"Bank of America's earnings beat reflected strong investment banking and equity trading, good deposit and loan growth, a 'little better' net interest income growth, and 'pristine credit,'" said Schorr.

Meanwhile Barclays analyst Jason Goldberg raised the firm's price target on Bank of America to $49 a share from $45. 

"The company's Q3 earnings came in ahead of expectations, and while a lower than expected provision helped, net interest income followed by fee income were also drivers," Goldberg told investors in a research note.

Barclays also has an outperform rating on the stock.

RBC Capital analyst Gerard Cassidy raised the price target on Bank of America to $50 a share from $44  while maintaining its outperform rating on the shares.

"The quarter marked an inflection point toward future growth as the company's diversified business model is positioned to benefit from an economic recovery in the U.S.," Cassidy wrote in a note to investors.

Cassidy added that the steepening in the yield curve should provide a tailwind to Bank of America earnings growth over the next 12-18 months.

Bank of America shares rose $1.31, or 2.9%, to $46.38 in afternoon trading.