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

Zacks Equity Research

Bank of America (BAC) closed at $35.17 in the latest trading session, marking a +0.6% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.09%. Meanwhile, the Dow gained 0.34%, and the Nasdaq, a tech-heavy index, added 0.23%.

Coming into today, shares of the nation's second-largest bank had gained 6.46% in the past month. In that same time, the Finance sector gained 3.15%, while the S&P 500 gained 3.81%.

Investors will be hoping for strength from BAC as it approaches its next earnings release. The company is expected to report EPS of $0.69, down 1.43% from the prior-year quarter. 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 should also note any recent changes to analyst estimates for BAC. Recent revisions tend to reflect the latest 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.

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. The Zacks Consensus EPS estimate remained stagnant within the past month. BAC is currently sporting a Zacks Rank of #2 (Buy).

Digging into valuation, BAC currently has a Forward P/E ratio of 13. Its industry sports an average Forward P/E of 12.71, so we one might conclude that BAC is trading at a premium comparatively.

Investors should also note that BAC has a PEG ratio of 1.44 right now. 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 1.55 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 57, which puts it in the top 23% 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.

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


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