Bank of America Revamps Credit Card Strategy to Boost Profits
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Should l Buy BAC?
Source: seekingalpha
- Profit Target Increase: Bank of America aims to boost annual profits from its consumer business to $20 billion by 2030, with a current net income of $12.2 billion for 2025 reflecting a 14% year-over-year growth, indicating strong growth potential in the consumer market.
- Customer Base Expansion: Currently serving approximately 69 million consumer customers, the bank targets an increase to 75 million by 2030, aiming to attract new clients efficiently through data-driven strategies while reducing operational costs.
- AI Utilization: The bank employs artificial intelligence to assess potential default risks among customers, optimizing outreach timing and enhancing risk management capabilities in its credit card business, thereby strengthening its competitive position in the market.
- Partnership Enhancement: Bank of America plans to expand collaborations with existing co-brand partners such as Alaska Air, Royal Caribbean, and Norwegian Cruise Line, aiming to increase market share in the credit card sector while addressing competitive pressures from other major issuers.
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Analyst Views on BAC
Wall Street analysts forecast BAC stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for BAC is 61.17 USD with a low forecast of 55.00 USD and a high forecast of 71.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
18 Analyst Rating
14 Buy
4 Hold
0 Sell
Strong Buy
Current: 55.380
Low
55.00
Averages
61.17
High
71.00
Current: 55.380
Low
55.00
Averages
61.17
High
71.00
About BAC
Bank of America Corporation is a bank holding company and a financial holding company. Its segments include Consumer Banking, Global Wealth & Investment Management (GWIM), Global Banking and Global Markets. Consumer Banking segment offers a range of credit, banking and investment products and services to consumers and small businesses. The GWIM includes two businesses: Merrill Wealth Management, which provides tailored solutions to meet clients' needs through a full set of investment management, brokerage, banking and retirement products and Bank of America Private Bank, which provides comprehensive wealth management solutions. Global Banking segment provides a range of lending-related products and services, integrated working capital management and treasury solutions, and underwriting and advisory services. Global Markets segment offers sales and trading services and research services to institutional clients across fixed-income, credit, currency, commodity, and equity businesses.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Bank of America Revamps Credit Card Strategy to Boost Profits
- Profit Target Increase: Bank of America aims to boost annual profits from its consumer business to $20 billion by 2030, with a current net income of $12.2 billion for 2025 reflecting a 14% year-over-year growth, indicating strong growth potential in the consumer market.
- Customer Base Expansion: Currently serving approximately 69 million consumer customers, the bank targets an increase to 75 million by 2030, aiming to attract new clients efficiently through data-driven strategies while reducing operational costs.
- AI Utilization: The bank employs artificial intelligence to assess potential default risks among customers, optimizing outreach timing and enhancing risk management capabilities in its credit card business, thereby strengthening its competitive position in the market.
- Partnership Enhancement: Bank of America plans to expand collaborations with existing co-brand partners such as Alaska Air, Royal Caribbean, and Norwegian Cruise Line, aiming to increase market share in the credit card sector while addressing competitive pressures from other major issuers.
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- Stock Sales Overview: Berkshire's recent stock sales totaled $12.5 billion, involving six stocks including Apple and Bank of America, indicating Buffett's cautious stance on high-valuation stocks, which may affect the company's short-term earnings performance.
- Investment Strategy Shift: In the third quarter, Berkshire allocated nearly $6.4 billion to stock purchases while adding $9.9 billion to short-term U.S. Treasury Bills, reflecting Buffett's concerns about market valuations and emphasis on liquidity, which could influence future investment decisions.
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- High-Yield Investments: Despite selling, Berkshire invested nearly $6.4 billion in equities during Q3, with $9.9 billion allocated to short-term U.S. Treasury Bills, reflecting a focus on liquidity and safety that may influence future investment strategies.
- Apple and Bank of America Reductions: Buffett has been trimming his stakes in Apple and Bank of America due to their high valuations, as Apple's stock has surged in recent years and Bank of America's price approached twice its tangible book value, prompting a reassessment of their investment worth.
- Cash Position Maintenance: Berkshire now holds cash and Treasury Bills amounting to one-third of its total value, demonstrating Buffett's cautious stance on the current market, which may affect his future investment decisions and market engagement.
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- Financial Flexibility: It highlights how cash can provide financial flexibility and security, allowing individuals and businesses to navigate uncertain economic conditions more effectively.
- Investment Opportunities: The piece also mentions that having cash on hand can create opportunities for strategic investments when market conditions are favorable.
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Bank of America Declares Quarterly Cash Dividend
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- Preferred Stock Dividend: Additionally, the Board declared a cash dividend of $1.75 per share on the 7% Cumulative Redeemable Preferred Stock, Series B, payable on April 24, 2026, to shareholders of record as of April 10, 2026, which further bolsters investor confidence.
- Customer Service Network: Bank of America operates approximately 3,600 retail financial centers and 15,000 ATMs across the U.S., serving nearly 70 million clients, showcasing its extensive reach and convenience in the financial services sector.
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Bank of America Revamps Credit Card Strategy to Boost Profits
- Profit Target Increase: Bank of America aims to boost annual profits from its consumer business to $20 billion by 2030, with a current net income of $12.2 billion for 2025 reflecting a 14% year-over-year growth, indicating strong growth potential in the consumer market.
- Customer Base Expansion: Currently serving approximately 69 million consumer customers, the bank targets an increase to 75 million by 2030, aiming to attract new clients efficiently through data-driven strategies while reducing operational costs.
- AI Utilization: The bank employs artificial intelligence to assess potential default risks among customers, optimizing outreach timing and enhancing risk management capabilities in its credit card business, thereby strengthening its competitive position in the market.
- Partnership Enhancement: Bank of America plans to expand collaborations with existing co-brand partners such as Alaska Air, Royal Caribbean, and Norwegian Cruise Line, aiming to increase market share in the credit card sector while addressing competitive pressures from other major issuers.
See More
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- Leadership Change: Warren Buffett's resignation as CEO of Berkshire Hathaway after over 65 years marks a significant turning point in the company's history, potentially impacting investor confidence and future strategic direction.
- Stock Sales Overview: Berkshire's recent stock sales totaled $12.5 billion, involving six stocks including Apple and Bank of America, indicating Buffett's cautious stance on high-valuation stocks, which may affect the company's short-term earnings performance.
- Investment Strategy Shift: In the third quarter, Berkshire allocated nearly $6.4 billion to stock purchases while adding $9.9 billion to short-term U.S. Treasury Bills, reflecting Buffett's concerns about market valuations and emphasis on liquidity, which could influence future investment decisions.
- Increased Cash Allocation: Currently, cash and Treasury Bills make up about one-third of Berkshire's total value, demonstrating Buffett's cautious approach to the current market environment, which may pose greater challenges for the company in finding viable investment opportunities.
See More
Buffett Sells Stocks for 12 Consecutive Quarters
- Selling Trend: Buffett has been a net seller of stocks for 12 consecutive quarters, with the latest round of sales totaling $12.5 billion, indicating his concerns about market valuations that could impact Berkshire Hathaway's portfolio performance.
- High-Yield Investments: Despite selling, Berkshire invested nearly $6.4 billion in equities during Q3, with $9.9 billion allocated to short-term U.S. Treasury Bills, reflecting a focus on liquidity and safety that may influence future investment strategies.
- Apple and Bank of America Reductions: Buffett has been trimming his stakes in Apple and Bank of America due to their high valuations, as Apple's stock has surged in recent years and Bank of America's price approached twice its tangible book value, prompting a reassessment of their investment worth.
- Cash Position Maintenance: Berkshire now holds cash and Treasury Bills amounting to one-third of its total value, demonstrating Buffett's cautious stance on the current market, which may affect his future investment decisions and market engagement.
See More
Berkshire Stock Rises as Investors Seek Safety, Bolstered by $350 Billion in Cash.
- Cash Reserves: The article discusses the potential benefits of having substantial cash reserves, suggesting that it may not be as detrimental as previously thought.
- Financial Flexibility: It highlights how cash can provide financial flexibility and security, allowing individuals and businesses to navigate uncertain economic conditions more effectively.
- Investment Opportunities: The piece also mentions that having cash on hand can create opportunities for strategic investments when market conditions are favorable.
- Economic Context: The discussion is framed within the current economic landscape, emphasizing the importance of liquidity in times of volatility.
See More
Bank of America Declares Quarterly Cash Dividend
- Dividend Announcement: Bank of America's Board of Directors declared a regular quarterly cash dividend of $0.28 per share on common stock, payable on March 27, 2026, to shareholders of record as of March 6, 2026, reflecting the company's commitment to shareholder returns.
- Preferred Stock Dividend: Additionally, the Board declared a cash dividend of $1.75 per share on the 7% Cumulative Redeemable Preferred Stock, Series B, payable on April 24, 2026, to shareholders of record as of April 10, 2026, which further bolsters investor confidence.
- Customer Service Network: Bank of America operates approximately 3,600 retail financial centers and 15,000 ATMs across the U.S., serving nearly 70 million clients, showcasing its extensive reach and convenience in the financial services sector.
- Digital Banking Advantage: With around 59 million verified digital users, the company offers industry-leading digital banking services, enhancing customer experience and driving business growth.
See More
JPMorgan's Jamie Dimon Set to Gain Nearly $250 Million from Stock Options Award
- CEO Compensation: JPMorgan CEO Jamie Dimon is set to gain nearly $250 million from a special option grant made in 2021.
- Incentive for Leadership: The grant is intended to motivate Dimon to continue his leadership role at the largest bank in the United States.
See More
