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

Zacks Equity Research

Bank of America (BAC) closed the most recent trading day at $27.89, moving +0.94% from the previous trading session. This change outpaced the S&P 500's 0.91% gain on the day. Meanwhile, the Dow gained 0.7%, and the Nasdaq, a tech-heavy index, added 1.02%.

Heading into today, shares of the nation's second-largest bank had lost 5.86% over the past month, lagging the Finance sector's loss of 1.21% and the S&P 500's loss of 2.74% in that time.

BAC will be looking to display strength as it nears its next earnings release. On that day, BAC is projected to report earnings of $0.58 per share, which would represent a year-over-year decline of 12.12%. Our most recent consensus estimate is calling for quarterly revenue of $22.20 billion, down 2.54% from the year-ago period.

BAC's full-year Zacks Consensus Estimates are calling for earnings of $2.71 per share and revenue of $90.80 billion. These results would represent year-over-year changes of +3.83% and -0.49%, respectively.

It is also important to note the recent changes to analyst estimates for BAC. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. Within the past 30 days, our consensus EPS projection has moved 3.93% lower. BAC is currently a Zacks Rank #3 (Hold).

In terms of valuation, BAC is currently trading at a Forward P/E ratio of 10.18. This valuation marks a discount compared to its industry's average Forward P/E of 10.8.

Also, we should mention that BAC has a PEG ratio of 1.13. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Banks - Major Regional stocks are, on average, holding a PEG ratio of 1.33 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 179, which puts it in the bottom 30% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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