U.S. markets open in 2 hours 31 minutes
  • S&P Futures

    3,437.25
    +5.00 (+0.15%)
     
  • Dow Futures

    28,197.00
    +15.00 (+0.05%)
     
  • Nasdaq Futures

    11,688.25
    +27.50 (+0.24%)
     
  • Russell 2000 Futures

    1,616.70
    +1.90 (+0.12%)
     
  • Crude Oil

    41.09
    -0.61 (-1.46%)
     
  • Gold

    1,922.40
    +7.00 (+0.37%)
     
  • Silver

    25.18
    +0.20 (+0.80%)
     
  • EUR/USD

    1.1862
    +0.0034 (+0.28%)
     
  • 10-Yr Bond

    0.7970
    0.0000 (0.00%)
     
  • Vix

    29.90
    +0.72 (+2.47%)
     
  • GBP/USD

    1.3069
    +0.0122 (+0.94%)
     
  • USD/JPY

    104.8330
    -0.6370 (-0.60%)
     
  • BTC-USD

    12,231.11
    +1,174.10 (+10.62%)
     
  • CMC Crypto 200

    245.85
    +6.93 (+2.90%)
     
  • FTSE 100

    5,824.86
    -64.36 (-1.09%)
     
  • Nikkei 225

    23,639.46
    +72.42 (+0.31%)
     

Bank of America (BAC) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
·3 mins read

In the latest trading session, Bank of America (BAC) closed at $23.34, marking a +0.34% move from the previous day. This move outpaced the S&P 500's daily gain of 0.3%. At the same time, the Dow added 0.2%, and the tech-heavy Nasdaq gained 0.37%.

Heading into today, shares of the nation's second-largest bank had lost 9% over the past month, lagging the Finance sector's loss of 4.67% and the S&P 500's loss of 5.02% in that time.

Investors will be hoping for strength from BAC as it approaches its next earnings release, which is expected to be October 14, 2020. In that report, analysts expect BAC to post earnings of $0.42 per share. This would mark a year-over-year decline of 25%. Meanwhile, our latest consensus estimate is calling for revenue of $20.56 billion, down 9.84% from the prior-year quarter.

BAC's full-year Zacks Consensus Estimates are calling for earnings of $1.61 per share and revenue of $86.18 billion. These results would represent year-over-year changes of -41.45% and -5.54%, respectively.

Any recent changes to analyst estimates for BAC should also be noted by investors. Recent revisions tend to reflect the latest near-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. 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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.06% lower. BAC currently has a Zacks Rank of #3 (Hold).

In terms of valuation, BAC is currently trading at a Forward P/E ratio of 14.47. This valuation marks a premium compared to its industry's average Forward P/E of 13.1.

Investors should also note that BAC has a PEG ratio of 2.07 right now. 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. Banks - Major Regional stocks are, on average, holding a PEG ratio of 2.07 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 216, which puts it in the bottom 15% 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.


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