Bank of America (BAC) Outpaces Stock Market Gains: What You Should Know
Bank of America (BAC) closed the most recent trading day at $26.05, moving +1.92% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.17%. Elsewhere, the Dow gained 0.57%, while the tech-heavy Nasdaq lost 0.34%.
Coming into today, shares of the nation's second-largest bank had gained 1.15% in the past month. In that same time, the Finance sector gained 3.77%, while the S&P 500 gained 8.34%.
BAC will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.43, down 23.21% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $20.76 billion, down 8.99% from the prior-year quarter.
BAC's full-year Zacks Consensus Estimates are calling for earnings of $1.63 per share and revenue of $86.47 billion. These results would represent year-over-year changes of -40.73% and -5.24%, 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. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 2.95% higher. BAC is holding a Zacks Rank of #3 (Hold) right now.
In terms of valuation, BAC is currently trading at a Forward P/E ratio of 15.72. This represents a premium compared to its industry's average Forward P/E of 14.31.
It is also worth noting that BAC currently has a PEG ratio of 2.25. 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. The Banks - Major Regional was holding an average PEG ratio of 2.25 at yesterday's closing price.
The Banks - Major Regional industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 215, which puts it in the bottom 16% 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.