Bank of America reported robust second-quarter results, beating analyst expectations. Net income rose 27% year-over-year to $9.1 billion. Diluted earnings per share increased 34% to $1.21. Revenue rose 15% to $31.6 billion. Significant growth in investment banking fees and a 33% jump in sales and trading revenue fueled this rise.
Despite the strong earnings report, some analysts suggest the bank's stock is now fully valued. One analysis resulted in a "Hold" rating. This analysis argues the current share price reflects a high future return on tangible common equity (ROTCE) of 16%. This valuation leaves little room for error if market-sensitive revenues normalize or credit costs increase. The bank achieved a 17% ROTCE for the quarter.