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

Zacks Equity Research

In the latest trading session, Bank of America (BAC) closed at $24.84, marking a +0.93% move from the previous day. This move outpaced the S&P 500's daily gain of 0.82%. Elsewhere, the Dow gained 1.05%, while the tech-heavy Nasdaq added 0.59%.

BAC will be looking to display strength as it nears its next earnings release. On that day, BAC is projected to report earnings of $0.33 per share, which would represent a year-over-year decline of 55.41%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $21.09 billion, down 8.64% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.48 per share and revenue of $85.90 billion, which would represent changes of -46.18% and -5.86%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for BAC. Recent revisions tend to reflect the latest near-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. 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 0.15% higher within the past month. BAC currently has a Zacks Rank of #3 (Hold).

In terms of valuation, BAC is currently trading at a Forward P/E ratio of 16.64. Its industry sports an average Forward P/E of 16.64, so we one might conclude that BAC is trading at a no noticeable deviation comparatively.

Meanwhile, BAC's PEG ratio is currently 2.38. 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. BAC's industry had an average PEG ratio of 2.78 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 124, which puts it in the top 49% 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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