Berkshire's Abel Trims BAC Again as Valuation Nears Fair; Wait Rating Intact

What happened

Berkshire Hathaway's Greg Abel continued reducing the company's Bank of America stake for the eighth consecutive quarter, extending a trend that began under Warren Buffett. The selling comes as BAC shares trade at $64.1, up 38.9% over the past year, after strong 2Q26 results with net income of $9.1B, EPS of $1.21, and investment-banking fees up 50% year over year. The DeepValue master report rates BAC a WAIT with conviction 3.5, arguing the current price already discounts a near-best-case scenario across consumer credit, net interest income, and capital-markets activity. Berkshire's reduction may be profit-taking, but it could also reflect caution about valuation or a shift toward other opportunities. For BAC, the fundamental picture remains solid but not cheap, and the next two quarterly reports are critical to confirm earnings quality.

Implication

Investors should avoid chasing BAC above $69 and consider trimming into strength, as the valuation at 14.6x earnings and 1.5x book leaves little room for disappointment. The Berkshire stake reduction is a signal from a long-term holder that the risk/reward has become less attractive, even if it is not a comment on BAC's franchise quality. Monitor 3Q26 and 4Q26 results for confirmation of loan growth, NII trajectory, and fee breadth; a miss on these could push the stock toward the mid-$50s. If BAC pulls back to the $56 area, it becomes attractive for accumulation given the durable deposit and wealth moats. Ultimately, the stock is a hold, not a buy, until earnings durability is proven.

Thesis delta

The Berkshire selling does not alter the WAIT thesis, which is based on valuation and earnings quality, but it adds a notable holder sentiment shift. It reinforces the view that BAC's risk/reward is less compelling at current prices. The core thesis remains that BAC is a quality franchise trading at fair value, and the next two quarters will determine if it deserves a higher multiple.