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

Bank of America BAC closed at $31.31 in the latest trading session, marking a +1.36% move from the prior day. This change outpaced the S&P 500's 0.77% gain on the day. Meanwhile, the Dow gained 1.01%, and the Nasdaq, a tech-heavy index, added 0.91%.

Heading into today, shares of the nation's second-largest bank had lost 0.16% over the past month, lagging the Finance sector's gain of 0.21% and the S&P 500's gain of 2.11% in that time.

Investors will be hoping for strength from BAC as it approaches its next earnings release, which is expected to be October 12, 2018. The company is expected to report EPS of $0.63, up 31.25% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $22.77 billion, up 4.25% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.52 per share and revenue of $91.73 billion, which would represent changes of +37.7% and +5.01%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for BAC. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.22% lower. BAC is currently a Zacks Rank #3 (Hold).

In terms of valuation, BAC is currently trading at a Forward P/E ratio of 12.24. For comparison, its industry has an average Forward P/E of 12.73, which means BAC is trading at a discount to the group.

We can also see that BAC currently has a PEG ratio of 1.53. 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. BAC's industry had an average PEG ratio of 1.28 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 43, which puts it in the top 17% 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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