Bank of America stock falls after 2025 Investor Day medium-term targets

Investing.com -- Bank of America (NYSE: BAC) stock fell 1.8% following the company’s 2025 Investor Day presentation, where it outlined new medium-term financial targets.

The banking giant unveiled growth targets including GDP-plus deposit growth of 4% or higher, loan growth of 5% or higher, and net interest income growth of 5%-7% compound annual growth rate. The bank also set an earnings per share growth target of 12% or more, along with a return on tangible common equity goal of 15% in the near term, rising to 16%-18% in the medium term.

These new targets represent a modest increase from Bank of America’s previous shareholder model for 2015-2024, which targeted 10%-12% EPS growth and 12%-15% return on tangible common equity. The bank aims to achieve operating leverage of 200-300 basis points or more, while maintaining an efficiency ratio between 55% and 59%.

The medium-term goals are based on key assumptions including moderate U.S. GDP and CPI growth, no recession, and the current forward interest rate curve. Despite the more ambitious targets, investors appeared unimpressed with the outlook, sending shares lower during the trading session.

Bank of America’s previous long-term model had focused on revenue growth at GDP-plus rates, expense growth at CPI levels, and operating leverage of 200 basis points or more, while maintaining strong capital and liquidity positions.

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