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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 at $29.52 in the latest trading session, marking a -0.24% move from the prior day. This change lagged the S&P 500's daily loss of 0.01%. At the same time, the Dow added 0.06%, and the tech-heavy Nasdaq lost 0.06%.

Prior to today's trading, shares of the nation's second-largest bank had gained 8.83% over the past month. This has outpaced the Finance sector's gain of 5.15% and the S&P 500's gain of 3.23% in that time.

Investors will be hoping for strength from BAC as it approaches its next earnings release. On that day, BAC is projected to report earnings of $0.68 per share, which would represent year-over-year growth of 3.03%. Meanwhile, our latest consensus estimate is calling for revenue of $22.11 billion, down 2.94% from the prior-year quarter.

BAC's full-year Zacks Consensus Estimates are calling for earnings of $2.82 per share and revenue of $91.01 billion. These results would represent year-over-year changes of +8.05% and -0.26%, respectively.

Any recent changes to analyst estimates for BAC should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

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. Over the past month, the Zacks Consensus EPS estimate has moved 0.11% lower. BAC is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, BAC is holding a Forward P/E ratio of 10.48. This valuation marks a discount compared to its industry's average Forward P/E of 11.44.

Also, we should mention that BAC has a PEG ratio of 1.16. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. BAC's industry had an average PEG ratio of 1.42 as of yesterday's close.

The Banks - Major Regional industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 185, which puts it in the bottom 28% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

To follow BAC in the coming trading sessions, be sure to utilize Zacks.com.


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