BofA projects financial gains, but investors want even more

• Key Insight: At its first investor day since 2011, Bank of America expressed optimism on a number of financial fronts, but it wasn’t enough to stop its stock from dropping slightly on Wednesday.
• Supporting Data: The bank issued new guidance on its return on tangible common equity, saying ROTCE would reach 16%-18% over the next three-to-five years.
• Expert Quote: “Although the market may initially find this disappointing, what we see as most important is that BofA is providing more transparency,” wrote TD Cowen analyst Steven Alexopoulos.

UPDATE: This story now includes additional quotes from Bank of America’s executives and new information about its financial targets.

At its first investor day in 15 years, Bank of America raised its sights for the future — but apparently not by enough for some investors.

The nation’s second-largest bank unveiled several new medium-term financial targets as part of its presentation on Wednesday, setting its guidance for return on tangible common equity and earnings per share, among other figures, slightly higher than what it posted last quarter.

But as several analysts pointed out, these projected improvements were largely in line with what Wall Street had already expected. By noon, BofA’s stock price had declined by about 2%.

“At first blush, this is a down the fairway update for BofA, with the top and bottom-line growth targets generally a continuation of recent trends,” Steven Alexopoulos, an analyst for TD Cowen, wrote in a research note. “Although the market may initially find this disappointing, what we see as most important is that BofA is providing more transparency” into its targets for return on tangible common equity and earnings per share.

The bank’s goal for ROTCE in the medium term — defined as within the next three-to-five years — is now 16-18%. That metric, a key measure of profitability for banks, was at 15.4% in the third quarter of 2025. And historically, BofA’s leadership had often forecasted ROTCE in the mid-teens.

BofA also predicted that its EPS would rise by 12% or more in the next three-to-five years. The bank had never previously issued this kind of guidance.

During a Q&A finishing out the investor day, investors asked the bank’s leaders why the new ROTCE target was capped at 18%.

“There is no cap to our ambition,” CEO Brian Moynihan responded.

Chief Financial Officer Alastair Borthwick gave a similar answer, while admitting to a “touch of conservatism” to account for unpredictable macro conditions.

“We don’t think about it as a ceiling. We just think that’s a natural step in our evolution,” Borthwick said. “We don’t know what the economy will necessarily look like, we don’t know what the capital rules will ultimately finalize at, but we feel really good about that 16-to-18 as the next step on our journey.”

Even if the outlook was unsurprising, several analysts said, it was still good news.

“While consensus was largely in line with the near-term guide (and maybe a little more), we believe the return aspirations are good enough to keep investors involved and supporting the stock,” wrote Glenn Schorr, an analyst at Evercore ISI.

In the first speech of the day, Moynihan celebrated the bank’s performance so far, but also emphasized its need to grow in the future.

“The growth is there and the risk is well managed,” Moynihan said. “But what does my team say when they see all that? ‘It’s a nice start.'”

One of those teammates is Holly O’Neill, BofA’s head of consumer, retail and preferred banking. Speaking after Moynihan, she listed many of her team’s recent accomplishments but, echoing her boss, also made it clear she would not rest on her laurels.

“This is not a story of complacency,” O’Neill said. “Our future growth is not reliant on size and scale alone. It’s driven by intentional strategies, continuous investments and how we bring our business to life in our local markets.”

O’Neill then went on to lay out some of her team’s plans to pursue that kind of growth. In credit cards, she said, the bank plans to roll out the next generation of its rewards program next year.

“The evolution will expand our reach, drive higher levels of loyalty and unlock new revenue opportunities across a broader client base,” O’Neill said.

The bank also plans to invest in the next generation of Erica, its AI-powered financial assistant for customers. Already, O’Neill said, Erica has brought about a 60% drop in service call volume.

O’Neill also set some medium-term targets for the units she leads: In the next three-to-five years, BofA’s consumer business hopes to reach 75 million clients, up from the 69 million it serves today, and take in an annual net income of $20 billion, up from the $10.8 billion it totaled in 2024.

These goals reflected the simple ethos Moynihan had invoked earlier.

“We have to grow,” the CEO said. “No excuses.”