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

Zacks Equity Research

In the latest trading session, Bank of America (BAC) closed at $29.17, marking a -0.61% move from the previous day. This change lagged the S&P 500's daily gain of 0.51%. Meanwhile, the Dow gained 0.36%, and the Nasdaq, a tech-heavy index, added 0.75%.

Coming into today, shares of the nation's second-largest bank had gained 7.39% in the past month. In that same time, the Finance sector gained 5.33%, while the S&P 500 gained 3.44%.

Investors will be hoping for strength from BAC as it approaches its next earnings release. The company is expected to report EPS of $0.70, up 6.06% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $22.11 billion, down 2.94% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.81 per share and revenue of $91.01 billion. These totals would mark changes of +7.66% and -0.26%, respectively, from last year.

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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.11% lower. BAC is currently a Zacks Rank #3 (Hold).

Looking at its valuation, BAC is holding a Forward P/E ratio of 10.45. This represents a discount compared to its industry's average Forward P/E of 11.35.

We can also see that BAC currently has a PEG ratio of 1.16. 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 1.41 as of yesterday's close.

The Banks - Major Regional industry is part of the Finance sector. This group has a Zacks Industry Rank of 153, putting it in the bottom 41% 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.

To follow BAC in the coming trading sessions, be sure to utilize Zacks.com.


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