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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 $28.69 in the latest trading session, marking a +1.02% move from the prior day. This change outpaced the S&P 500's 0.85% gain on the day. At the same time, the Dow added 0.77%, and the tech-heavy Nasdaq gained 1.08%.

Prior to today's trading, shares of the nation's second-largest bank had lost 5.49% over the past month. This has lagged the Finance sector's loss of 2.26% and the S&P 500's loss of 2.06% in that time.

Wall Street will be looking for positivity from BAC as it approaches its next earnings report date. The company is expected to report EPS of $0.72, up 14.29% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $23.20 billion, up 2.63% from the year-ago period.

BAC's full-year Zacks Consensus Estimates are calling for earnings of $2.86 per share and revenue of $92.60 billion. These results would represent year-over-year changes of +9.58% and +1.49%, respectively.

Any recent changes to analyst estimates for BAC should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. Within the past 30 days, our consensus EPS projection remained stagnant. BAC is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, BAC is holding a Forward P/E ratio of 9.95. Its industry sports an average Forward P/E of 10.94, so we one might conclude that BAC is trading at a discount comparatively.

We can also see that BAC currently has a PEG ratio of 1.24. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. BAC's industry had an average PEG ratio of 1.36 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 154, which puts it in the bottom 40% 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.

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


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