BAC Leads US Banks on Valuation as JPM Remains Quality Benchmark

The US bank sector outlook is constructive but considered late-cycle, with improving earnings, returns, and share prices offset by concerns over rate sensitivity and credit risk.

Among major banks, Bank of America (BAC) stands out for its valuation, offering a strong balance between discount and fundamentals. JPMorgan Chase (JPM), on the other hand, remains the quality benchmark due to its premium execution.

Bank stocks have shown positive momentum, but leadership is uneven: BAC has gained 13.45% year-to-date (YTD) and 25.34% over six months, while JPM has gained 10.07% YTD and 19.29% over the same period.

The large banks are producing solid returns and revenue growth, with ROE measuring how efficiently they turn shareholder capital into profit. For example, JPM's revenue grew from $130.90 billion in 2021 to $168.24 billion in 2025, while net income reached $57.05 billion in 2025.

The main risks facing the sector include falling rates compressing net interest margins, credit risk due to commercial real estate and consumer delinquencies, costs related to technology, compliance, and deposit competition, and valuation as momentum has already priced in part of the recovery.