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

Zacks Equity Research

Bank of America (BAC) closed at $34.85 in the latest trading session, marking a -0.14% move from the prior day. This move lagged the S&P 500's daily gain of 0.35%. At the same time, the Dow added 0.24%, and the tech-heavy Nasdaq gained 0.56%.

Heading into today, shares of the nation's second-largest bank had gained 5.47% over the past month, outpacing the Finance sector's gain of 4.21% and the S&P 500's gain of 4.69% in that time.

Wall Street will be looking for positivity from BAC as it approaches its next earnings report date. This is expected to be January 15, 2020. On that day, BAC is projected to report earnings of $0.69 per share, which would represent a year-over-year decline of 1.43%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $22.14 billion, down 2.61% from the year-ago period.

Any recent changes to analyst estimates for BAC should also be noted by investors. 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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, 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. Within the past 30 days, our consensus EPS projection has moved 0.18% higher. BAC currently has a Zacks Rank of #2 (Buy).

Investors should also note BAC's current valuation metrics, including its Forward P/E ratio of 11.59. Its industry sports an average Forward P/E of 12.2, so we one might conclude that BAC is trading at a discount comparatively.

Investors should also note that BAC has a PEG ratio of 1.29 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. The Banks - Major Regional was holding an average PEG ratio of 1.45 at yesterday's closing price.

The Banks - Major Regional industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 34, which puts it in the top 14% 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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