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

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  • BAC

Bank of America (BAC) closed the most recent trading day at $44.15, moving +0.64% from the previous trading session. This change lagged the S&P 500's 1.17% gain on the day. At the same time, the Dow added 1.87%, and the tech-heavy Nasdaq gained 0.62%.

Prior to today's trading, shares of the nation's second-largest bank had lost 6.6% over the past month. This has lagged the Finance sector's loss of 5.58% and the S&P 500's loss of 2.46% in that time.

Wall Street will be looking for positivity from Bank of America as it approaches its next earnings report date. This is expected to be January 19, 2022. In that report, analysts expect Bank of America to post earnings of $0.78 per share. This would mark year-over-year growth of 32.2%. Our most recent consensus estimate is calling for quarterly revenue of $21.99 billion, up 9.39% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.49 per share and revenue of $89.18 billion. These totals would mark changes of +86.63% and +4.27%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for Bank of America. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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. Within the past 30 days, our consensus EPS projection has moved 0.09% higher. Bank of America is currently sporting a Zacks Rank of #2 (Buy).

Digging into valuation, Bank of America currently has a Forward P/E ratio of 12.56. For comparison, its industry has an average Forward P/E of 10.8, which means Bank of America is trading at a premium to the group.

Meanwhile, BAC's PEG ratio is currently 1.79. 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. The Banks - Major Regional industry currently had an average PEG ratio of 1.3 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 102, which puts it in the top 41% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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