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

Zacks Equity Research
·3-min read

Bank of America (BAC) closed at $39.13 in the latest trading session, marking a +0.05% move from the prior day. The stock outpaced the S&P 500's daily loss of 0.08%.

Prior to today's trading, shares of the nation's second-largest bank had lost 4.4% over the past month. This has lagged the Finance sector's loss of 2.28% and the S&P 500's loss of 1.81% in that time.

BAC will be looking to display strength as it nears its next earnings release. In that report, analysts expect BAC to post earnings of $0.71 per share. This would mark year-over-year growth of 39.22%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $21.7 billion, up 6.73% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.34 per share and revenue of $87.86 billion, which would represent changes of +78.61% and +2.72%, respectively, from the prior year.

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Investors should also note any recent changes to analyst estimates for BAC. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. The Zacks Consensus EPS estimate has moved 1.08% higher within the past month. BAC is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, BAC currently has a Forward P/E ratio of 11.73. This represents a premium compared to its industry's average Forward P/E of 10.5.

We can also see that BAC currently has a PEG ratio of 1.68. 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 1.19 as of yesterday's close.

The Banks - Major Regional industry is part of the Finance sector. This group has a Zacks Industry Rank of 113, putting it in the top 45% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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