Quick Take on 2Q26 Earnings Result: Here Comes More Operating Leverage

Research evidence excerpt

Quick Take on 2Q26 Earnings Result: Here Comes More Operating Leverage

Idea

July 14, 2026 11:28 PM GMT

Morgan Stanley & Co. LLCMBank of America | North America Manan Gosalia

Equity Analyst

Quick Take on 2Q26 Earnings Manan.Gosalia@morganstanley.comRyan Kenny, CFA +1 212 761-4092

Ryan.Kenny@morganstanley.com +1 212 761-1664

Result: Here Comes More Connell J Schmitz

Research Associate

Connell.Schmitz@morganstanley.com +1 212 761-6252

Operating Leverage

Bank of America (BAC.N, BAC UN)

Large Cap Banks | United States of America

Reaction to earnings

Stock Rating Overweight

Strengthens our thesis Modest upside Modest revision higher Industry View Attractive

Impact to our thesis Financial results versus consensus Direction of next 12-month Price target $67.00

consensus EPS Shr price, close (Jul 14, 2026) $60.62

Mkt cap, curr (mm) $441,828

Source: Company data, Morgan Stanley Research 52-Week Range $61.21-44.75

New '26 positive operating leverage guidance of 300-400bps is Fiscal Year Ending 12/25 12/26e 12/27e 12/28e

EPS ($)** 3.83 4.72 5.39 6.12

even better than our positive call coming into the quarter. BAC Prior EPS ($)** - 4.56 5.33 6.11

is now on track to hit 16% ROTCE in '26, a year earlier than P/EEPS ($)§ 14.43.80 12.84.51 11.25.12 5.809.9

expected, with room for further upside next year. Reiterate OW Div yld (%) 2.0 2.0 2.2 2.4

as BAC executes on their Investor Day strategy. Unlessframeworkotherwise noted, all metrics are based on Morgan Stanley ModelWare

** = Based on consensus methodology

§ = Consensus data is provided by Refinitiv Estimates

Our Key Takeaways: e = Morgan Stanley Research estimates

Quarterly EPS ($)

• Operating leverage remains the core earnings story: BAC delivered 2026e 2026e 2027e 2027e