Bank of America has issued a strong bullish recommendation on major U.S. bank stocks, citing improved credit quality, rising net interest margins, and resilient loan demand. The firm upgraded its outlook on BAC, JPM, WFC, and C, positioning them as top picks for 2026.
- Bank of America upgraded BAC, JPM, WFC, and C to 'Buy' rating
- BAC EPS forecasted at +12% YoY growth in 2026
- JPM projected 14% EPS growth and price target raised to $210
- WFC and C forecasted at 9% and 11% EPS growth respectively
- S&P 500 Financials Index expected to rise 15% in 12 months
- Sector outlook driven by stable credit quality and rising net interest margins
Bank of America has issued a decisive bullish stance on the U.S. banking sector, elevating its investment outlook on four major financial institutions. The firm highlighted improving fundamentals across the industry, particularly in the areas of credit quality, loan growth, and net interest margin expansion. With the Federal Reserve signaling a pause in rate hikes and potential cuts later in 2026, the environment is favorable for banks' earnings momentum. The firm specifically upgraded its rating on Bank of America (BAC), JPMorgan Chase (JPM), Wells Fargo (WFC), and Citigroup (C), assigning them a 'Buy' recommendation. BAC was noted for its strong retail deposit base and disciplined capital allocation, while JPM received praise for its diversified revenue streams and resilience in volatile markets. WFC was highlighted for its turnaround progress in risk management and efficiency improvements, and C was lauded for its global franchise strength and recovery in consumer lending. Bank of America's model forecasts show BAC earnings per share growing by 12% year-over-year in 2026, JPM by 14%, WFC by 9%, and C by 11%. The firm also projected a 15% average rise in the S&P 500 Financials Index over the next 12 months, driven largely by these four stocks. The firm's price targets have been raised accordingly: BAC to $52 (from $45), JPM to $210 (from $185), WFC to $48 (from $40), and C to $85 (from $72). The move is expected to influence portfolio repositioning among institutional and retail investors. ETFs tracking the financial sector, such as XLF and KBE, are likely to see increased inflows. The call also reflects confidence in the sector’s ability to withstand potential economic headwinds, including elevated unemployment in late 2025, due to strong capital buffers and conservative lending practices.