If the 28% advance from Bank of America Corp (NYSE:BAC) over the course of the past three months has you leery of stepping into a new position in BAC stock, you’re not alone. I don’t care for buying overbought stocks either. With a little patience, we may be able to get into this trade at a better price soon enough.

If there was ever a name we had good reason to doubt would meaningfully pull back, however, BAC may well be it. Its valuation looks a bit rich on a trailing basis. But between the forward-looking price-earnings ratio and the economic environment we seem to be entering, BAC stock may be able to hold the line while it regroups for the next bullish wave.

BAC Stock Is a Work in Progress

Those who know Bank of America well will recall it was something of a late bloomer coming out of the subprime meltdown of 2008. Failing more than its fair share of so-called stress tests imposed by the Federal Reserve, the bank wasn’t allowed to pass as much capital back to shareholders as rivals like Wells Fargo & Co (NYSE:WFC) or Citigroup Inc (NYSE:C) were.

The tide started to turn in earnest in 2016 though, and accelerated this year. The specifics? Last year, the Fed finally gave the bank the big green light it had been hoping for in terms of its dividend. This year, many of the initiatives Bank of America CEO Brian Moynihan had put in place finally began to get traction. Namely, his mission of culling another $5.5 billion in operating costs that was unveiled last fall is bearing fruit. By the middle of this year, it was clear the bank would be able to reach if not exceed that target.

Simultaneously (and as expected), higher interest rates have benefited B of A by making its lending business more profitable.

The Fed has raised interest rates by a quarter of a point three separate times in 2017. Coupled with a fourth-rate increase in December of 2016, rates are now a full percentage point above what they were a year ago, widening the margins banks enjoy on their loans. This includes Bank of America, perhaps more than any other bank right now. It saw a 9.4% improvement in last quarter’s net interest income, thanks to the favorable interest rate environment.

2018 Poised To Be a Banner Year for BAC Stock

And yet, for all the progress B of A has made of late, it’s still not where it’s ultimately going to be. Nor is BAC presently reflecting its full potential value once all the pieces fall all the way into place. Next year, however, looks like it will be the year it’s going to happen. That largely explains why BAC stock is relatively overvalued now.

As of the latest look, the BAC stock price of around $29.50 translates into a relatively frothy trailing P/E of 16.9. Wells Fargo shares, for comparison, are priced at an earnings multiple of 15.7 while Citigroup sports a P/E of 14.5.

This isn’t about the past four quarters though, and the market knows it. This is about the foreseeable future, and that’s where Bank of America starts to shine. As of the latest look, analysts are calling for earnings of $2.16 per share in 2018, up from 2017’s projected bottom line of $1.82. And that’s up from last year’s profit of $1.50 per share of BAC stock.

Those numbers make it clear that 2017 was a key pivot point. There was a 44% increase in income projected between 2016 and 2018. The full brunt of that move deeper into the black, though, isn’t yet fully indicated in the trailing 12-month numbers. They’re coming though, and the stock’s got plenty of value on a forward-looking basis. Its forward-looking (2018) P/E of 13.6, which is roughly in line with its aforementioned rivals.

That’s the long way of saying Bank of America shares aren’t necessarily ripe for a wave of profit-taking based on its currently frothy valuation.

Bottom Line for BAC Stock

This isn’t to suggest BAC stock is incapable of peeling back a little, or even a lot, in the foreseeable future. There’s no denying a great deal of faith has been placed in the prospects of strong economic growth that will force the Fed to continue ratcheting interest rates higher, yet with lending remaining unstifled. Maybe that’s not the way things are going to pan out.

Assuming no major economic curve balls are headed our way though, if you’re waiting for a dip you can use to scoop up some B of A shares, know that you could be waiting a very long time.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can follow him on Twitter, at @jbrumley.