Royal Bank of Canada lowers its target price for Bank of America Corp (BAC.US) to 45 US dollars, but still sees long-term potential.

Royal Bank of Canada has lowered its price target for Bank of America Corp (BAC.US) from $50 to $45, but still remains optimistic about the stock. This adjustment reflects Royal Bank of Canada's cautious attitude towards the future performance of Bank of America Corp in the context of increasing economic uncertainty. Bank of America Corp recently reported its first-quarter financial results, showing that its net interest income and trading revenue exceeded expectations, driving profits and revenue above analyst expectations. Specifically, the bank achieved operating revenue of $27.4 billion in the first quarter, a 6% year-over-year increase; net profit reached $7.4 billion, a 10% increase from the same period last year; diluted earnings per share were $0.90, compared to $0.76 in the same period last year. Royal Bank of Canada pointed out that Bank of America Corp has achieved strong performance in the face of macroeconomic challenges, and its efforts to increase deposits and loans are expected to enhance profitability in the long term. In addition, Bank of America Corp's low-cost deposit base has left a deep impression on Royal Bank of Canada. Despite facing challenges, analysts on average expect Bank of America Corp's earnings per share to increase from $3.21 in 2024 to $3.64 this year, and further rise to $4.26 in 2026. The stock has dropped 10% in the past month and 20% in the past three months. Royal Bank of Canada's adjustment also implies confidence in Bank of America Corp's ability to maintain profit levels in a potential economic downturn, believing that the meaningful risk reduction measures taken by the bank after the financial crisis will take effect.