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Bank of America (BAC) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

Bank of America (BAC) closed the most recent trading day at $26.45, moving -1.23% from the previous trading session. This change lagged the S&P 500's 0.32% loss on the day. Elsewhere, the Dow lost 0.47%, while the tech-heavy Nasdaq lost 0.34%.

Prior to today's trading, shares of the nation's second-largest bank had lost 12.25% over the past month. This has lagged the Finance sector's loss of 6.12% and the S&P 500's loss of 4.64% in that time.

BAC will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.68, up 3.03% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $22.14 billion, down 2.8% from the year-ago period.

BAC's full-year Zacks Consensus Estimates are calling for earnings of $2.83 per share and revenue of $91.06 billion. These results would represent year-over-year changes of +8.43% and -0.2%, respectively.

It is also important to note the recent changes to analyst estimates for BAC. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.11% lower within the past month. BAC currently has a Zacks Rank of #3 (Hold).

Investors should also note BAC's current valuation metrics, including its Forward P/E ratio of 9.48. This represents a discount compared to its industry's average Forward P/E of 10.47.

We can also see that BAC currently has a PEG ratio of 1.05. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Banks - Major Regional stocks are, on average, holding a PEG ratio of 1.27 based on yesterday's closing prices.

The Banks - Major Regional industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 228, which puts it in the bottom 11% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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