BofA Delivers Strong Q4, but Leverage Outlook Disappoints, TD Cowen Notes

Bank of America Corporation (NYSE:BAC) is included among the 15 Best S&P 500 Dividend Stocks to Buy in 2026.

On January 15, TD Cowen cut its price target on Bank of America Corporation (NYSE:BAC) to $64 from $66, while sticking with a Buy rating. The firm refreshed its model after BofA’s Q4 results came in better than expected. However, Cowen noted that management’s outlook for operating leverage landed toward the low end of what investors were hoping to hear, which took some shine off the beat.

Separately, Reuters reported on January 20 that Bank of America plans to hand out roughly $1 billion worth of equity to employees across the company, excluding senior management, after wrapping up a strong year fueled by a sharp jump in profits. The stock awards will total close to 19 million shares and mark the ninth year in a row that the bank has issued broad-based employee equity grants.

Earlier this month, BofA topped Wall Street’s expectations for fourth-quarter earnings. Trading desks benefited from volatile markets, while the bank also earned more from interest income. For the full year 2025, profit climbed to $30.5 billion, up from $27 billion the year before. The stock also had a strong run, ending the year up about 25%, which is its third straight year of gains.

Looking ahead, the broader banking industry is gearing up for another active year in dealmaking. Investment banking revenues could improve as big M&A activity picks up again and more large IPOs return to the market. On top of that, net interest income could get a boost if loan demand improves, especially with borrowing costs coming down and customers becoming more willing to take on debt.

Bank of America Corporation (NYSE:BAC) is one of the largest US financial institutions, with operations spanning consumer banking, wealth management, corporate banking, and global markets.

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