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

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Bank of America (BAC) closed the most recent trading day at $31.46, moving -1.75% from the previous trading session. This move lagged the S&P 500's daily loss of 0.38%. At the same time, the Dow lost 0.5%, and the tech-heavy Nasdaq lost 0.46%.

Prior to today's trading, shares of the nation's second-largest bank had lost 8.01% over the past month. This has lagged the Finance sector's loss of 5.85% and the S&P 500's loss of 6.69% in that time.

Investors will be hoping for strength from Bank of America as it approaches its next earnings release, which is expected to be July 18, 2022. In that report, analysts expect Bank of America to post earnings of $0.81 per share. This would mark a year-over-year decline of 21.36%. Meanwhile, our latest consensus estimate is calling for revenue of $23.2 billion, up 8.08% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.34 per share and revenue of $94.5 billion, which would represent changes of -6.44% and +6.05%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Bank of America. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.28% higher within the past month. Bank of America currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Bank of America has a Forward P/E ratio of 9.58 right now. Its industry sports an average Forward P/E of 9.58, so we one might conclude that Bank of America is trading at a no noticeable deviation comparatively.

Also, we should mention that BAC has a PEG ratio of 1.37. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Banks - Major Regional industry currently had an average PEG ratio of 1.37 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 154, which puts it in the bottom 40% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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