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

Zacks Equity Research

In the latest trading session, Bank of America (BAC) closed at $32.84, marking a -1.76% move from the previous day. This change lagged the S&P 500's 0.66% loss on the day. Elsewhere, the Dow lost 1.01%, while the tech-heavy Nasdaq lost 0.55%.

Coming into today, shares of the nation's second-largest bank had gained 3.18% in the past month. In that same time, the Finance sector gained 0.8%, while the S&P 500 gained 1.77%.

Wall Street will be looking for positivity from BAC as it approaches its next earnings report date. On that day, BAC is projected to report earnings of $0.69 per share, which would represent a year-over-year decline of 1.43%. Our most recent consensus estimate is calling for quarterly revenue of $22.22 billion, down 2.29% from the year-ago period.

BAC's full-year Zacks Consensus Estimates are calling for earnings of $2.69 per share and revenue of $91.21 billion. These results would represent year-over-year changes of +3.07% and -0.04%, respectively.

Investors might also notice 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.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Within the past 30 days, our consensus EPS projection has moved 0.38% higher. BAC is currently a Zacks Rank #3 (Hold).

In terms of valuation, BAC is currently trading at a Forward P/E ratio of 12.43. This represents a premium compared to its industry's average Forward P/E of 12.39.

Investors should also note that BAC has a PEG ratio of 1.38 right now. 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. BAC's industry had an average PEG ratio of 1.53 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 145, which puts it in the bottom 44% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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