U.S. Markets close in 4 hrs 42 mins

Bank of America (BAC) Gains But Lags Market: What You Should Know

Zacks Equity Research

Bank of America (BAC) closed at $33.42 in the latest trading session, marking a +0.21% move from the prior day. This move lagged the S&P 500's daily gain of 0.42%. Meanwhile, the Dow gained 0.15%, and the Nasdaq, a tech-heavy index, added 0.66%.

Prior to today's trading, shares of the nation's second-largest bank had gained 3.99% over the past month. This has outpaced the Finance sector's gain of 2.34% and lagged the S&P 500's gain of 4.09% 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 $0.69, down 1.43% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $22.22 billion, down 2.29% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.69 per share and revenue of $91.21 billion, which would represent changes of +3.07% and -0.04%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for BAC. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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 0.38% higher within the past month. BAC currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, BAC is holding a Forward P/E ratio of 12.4. Its industry sports an average Forward P/E of 12.33, so we one might conclude that BAC is trading at a premium comparatively.

Meanwhile, BAC's PEG ratio is currently 1.38. 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. Banks - Major Regional stocks are, on average, holding a PEG ratio of 1.49 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 102, which puts it in the top 40% 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.

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


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Bank of America Corporation (BAC) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research