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

Zacks Equity Research
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Bank of America (BAC) closed at $30.14 in the latest trading session, marking a -0.95% move from the prior day. This move lagged the S&P 500's daily gain of 0.53%. At the same time, the Dow added 0.57%, and the tech-heavy Nasdaq gained 0.75%.

Coming into today, shares of the nation's second-largest bank had gained 0.23% in the past month. In that same time, the Finance sector lost 0.29%, while the S&P 500 gained 2.16%.

Investors will be hoping for strength from BAC as it approaches its next earnings release, which is expected to be October 12, 2018. In that report, analysts expect BAC to post earnings of $0.63 per share. This would mark year-over-year growth of 31.25%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $22.70 billion, up 3.94% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.52 per share and revenue of $91.57 billion, which would represent changes of +37.7% and +4.83%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for BAC. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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 has moved 0.13% lower within the past month. BAC is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note BAC's current valuation metrics, including its Forward P/E ratio of 12.07. Its industry sports an average Forward P/E of 12.59, so we one might conclude that BAC is trading at a discount comparatively.

It is also worth noting that BAC currently has a PEG ratio of 1.51. 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. BAC's industry had an average PEG ratio of 1.26 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 58, which puts it in the top 23% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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