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

Bank of America (BAC) closed at $28.69 in the latest trading session, marking a +1.88% move from the prior day. The stock outpaced the S&P 500's daily gain of 1.13%. Meanwhile, the Dow gained 0.63%, and the Nasdaq, a tech-heavy index, added 1.28%.

Prior to today's trading, shares of the nation's second-largest bank had gained 16.94% over the past month. This has outpaced the Finance sector's gain of 14.47% and the S&P 500's gain of 10.9% in that time.

BAC will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.50, down 32.43% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $19.91 billion, down 10.9% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.77 per share and revenue of $85.69 billion, which would represent changes of -35.64% and -6.09%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for BAC. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for 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. Within the past 30 days, our consensus EPS projection remained stagnant. BAC is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, BAC is holding a Forward P/E ratio of 15.88. This valuation marks a premium compared to its industry's average Forward P/E of 13.77.

Also, we should mention that BAC has a PEG ratio of 2.27. 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 2 as of yesterday's close.

The Banks - Major Regional industry is part of the Finance sector. This group has a Zacks Industry Rank of 129, putting it in the top 50% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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