Back to top

Image: Bigstock

Bank of America (BAC) Dips More Than Broader Market: What You Should Know

Read MoreHide Full Article

Bank of America (BAC - Free Report) closed at $45.91 in the latest trading session, marking a -1.8% move from the prior day. The stock's change was less than the S&P 500's daily loss of 0.61%. Meanwhile, the Dow experienced a drop of 0.54%, and the technology-dominated Nasdaq saw a decrease of 0.62%.

Prior to today's trading, shares of the nation's second-largest bank had gained 3.59% over the past month. This has outpaced the Finance sector's gain of 1.62% and the S&P 500's gain of 2.85% in that time.

Analysts and investors alike will be keeping a close eye on the performance of Bank of America in its upcoming earnings disclosure. The company is predicted to post an EPS of $0.80, indicating a 14.29% growth compared to the equivalent quarter last year. Alongside, our most recent consensus estimate is anticipating revenue of $25.25 billion, indicating a 15.01% upward movement from the same quarter last year.

BAC's full-year Zacks Consensus Estimates are calling for earnings of $3.27 per share and revenue of $101.83 billion. These results would represent year-over-year changes of -4.39% and +3.3%, respectively.

Investors might also notice recent changes to analyst estimates for Bank of America. These recent revisions tend to reflect the evolving nature of short-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Bank of America currently has a Zacks Rank of #2 (Buy).

Looking at its valuation, Bank of America is holding a Forward P/E ratio of 14.3. For comparison, its industry has an average Forward P/E of 17.71, which means Bank of America is trading at a discount to the group.

It's also important to note that BAC currently trades at a PEG ratio of 1.58. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Financial - Investment Bank industry had an average PEG ratio of 1.53 as trading concluded yesterday.

The Financial - Investment Bank industry is part of the Finance sector. With its current Zacks Industry Rank of 50, this industry ranks in the top 20% of all industries, numbering over 250.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Bank of America Corporation (BAC) - free report >>

Published in