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

Bank of America (BAC) closed at $30.63 in the latest trading session, marking a -1.45% move from the prior day. This change lagged the S&P 500's daily loss of 0.38%. Meanwhile, the Dow lost 0.46%, and the Nasdaq, a tech-heavy index, added 0.17%.

Prior to today's trading, shares of the nation's second-largest bank had lost 6.5% over the past month. This has lagged the Finance sector's loss of 4.51% and the S&P 500's loss of 4.88% in that time.

Wall Street will be looking for positivity from BAC as it approaches its next earnings report date. This is expected to be April 15, 2020. The company is expected to report EPS of $0.74, up 5.71% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $23.24 billion, up 1.03% from the year-ago period.

BAC's full-year Zacks Consensus Estimates are calling for earnings of $3.05 per share and revenue of $91.99 billion. These results would represent year-over-year changes of +10.91% and +0.82%, respectively.

It is also important to note the recent changes to analyst estimates for BAC. 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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 0.16% higher. BAC is currently a Zacks Rank #2 (Buy).

Looking at its valuation, BAC is holding a Forward P/E ratio of 10.18. For comparison, its industry has an average Forward P/E of 10.45, which means BAC is trading at a discount to the group.

It is also worth noting that BAC currently has a PEG ratio of 1.13. 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 1.3 as of yesterday's close.

The Banks - Major Regional industry is part of the Finance sector. This group has a Zacks Industry Rank of 30, putting it in the top 12% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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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