Morgan Stanley has lifted its rating on $BAC from “Equal-Weight” to “Overweight,” with a revised price target of $47. This move signals growing confidence in Bank of America’s ability to weather economic uncertainty and rebound from recent sector-wide pressures. Despite macroeconomic concerns that have weighed on banking stocks, Morgan Stanley’s analysts see $BAC as a compelling opportunity at current levels.
📌 Analyst Betsy Graseck noted that Bank of America appears attractively priced relative to its long-term earnings potential. Even in a scenario where the U.S. economy enters a mild downturn, the stock is seen as a value play with solid fundamentals and a strong retail banking presence.
📌 This upgrade comes at a time when financials are broadly out of favor, creating a classic contrarian opportunity. With a robust balance sheet and improving return on equity metrics, $BAC stands out among its peers.
💰 Dividend Fundamentals
💵 $BAC pays a quarterly dividend of $0.26 per share, which translates to an annual yield of approximately 2.79%.
📊 The dividend payout ratio is a conservative 37.26%, suggesting strong earnings coverage and room for future increases.
📈 Bank of America has increased its dividend for 11 consecutive years, with an average five-year dividend growth rate of 13.83%.
💼 The consistent track record and low payout ratio highlight the bank’s commitment to shareholder returns while maintaining financial discipline.
📌 Overall, Morgan Stanley’s upgrade reinforces the case for $BAC as a long-term holding with solid dividend income and attractive upside potential.