Bank of America Falls After HSBC Downgrade, Citing Overvaluation And Economic Risks

Zinger Key PointsHSBC downgraded Bank of America from Buy to Hold, warning that risks like slowing growth and future rate cuts aren't reflected in the stockMajor U.S. bank stocks fell after a strong rally, with Bank of America, JPMorgan, and Goldman Sachs leading declines.Get daily-updated rankings across momentum, growth, value, trends, and quality to spot the strongest stocks in any market.Bank of America Inc.BACshares are trading lower Tuesday after HSBC downgraded thestock from Buy to Hold.What To Know:The downgrade comes despite HSBC raising its price target on Bank of America from $47 to $51, signaling that while there may still be upside, the stock's recent rally may have already priced in most of the near-term positives.The downgrade was part of a broader reassessment of large U.S. banks by HSBC analystSaul Martinez,who also cut ratings on JPMorgan Chase and Goldman Sachs,according to Bloomberg. Martinez cited "downside risks" that he believes are not yet reflected in current valuations, including persistent macroeconomic uncertainty, the potential for slowing economic growth and expectations for further interest rate cuts in 2025 and 2026.Bank of America has surged nearly 40% from its April lows, part of a strong rally in the banking sector fueled by optimism around earnings, stress test results and looser regulations. However, the KBW Bank Index, which tracks major U.S. lenders, ended an 11-day winning streak on Monday, the longest run in its history, indicating that the sector may be entering a more volatile phase.HSBC maintained a more favorable view on super-regional banks such as U.S. Bancorp and PNC Financial, calling them better valued even after their own rallies. For now, the shift in sentiment appears to be weighing on Wall Street's biggest names, including Bank of America.BAC Price Action:Bank of America shares were down 2.65% at $47.37 at the time of writing, according toBenzinga Pro.Loading...Loading...Read Next:S&P 500 Near 7,000? Inside Goldman’s New Gravity-Defying Forecast.BACBank of America Corp$47.31-2.76%Stock Score Locked: Edge Members OnlyBenzinga Rankings give you vital metrics on any stock – anytime.Unlock RankingsEdge RankingsMomentum70.87Growth72.86Quality65.94ValueN/APrice TrendShortMediumLongOverviewThis content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.Market News and Data brought to you by Benzinga APIs© 2025 Benzinga.com. . .Posted In:NewsMoverswhy it's moving