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Bank of America (BAC) Gains But Lags Market: What You Should Know

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Bank of America (BAC - Free Report) closed the most recent trading day at $26.02, moving +1.21% from the previous trading session. This move lagged the S&P 500's daily gain of 1.54%. Meanwhile, the Dow gained 1.59%, and the Nasdaq, a tech-heavy index, added 0.98%.

Prior to today's trading, shares of the nation's second-largest bank had gained 2.8% over the past month. This has lagged the Finance sector's gain of 4.61% and the S&P 500's gain of 8% in that time.

BAC will be looking to display strength as it nears its next earnings release. In that report, analysts expect BAC to post earnings of $0.43 per share. This would mark a year-over-year decline of 23.21%. Our most recent consensus estimate is calling for quarterly revenue of $20.76 billion, down 8.99% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.62 per share and revenue of $86.47 billion. These totals would mark changes of -41.09% and -5.24%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for BAC. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 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 2.81% 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 15.83. This valuation marks a premium compared to its industry's average Forward P/E of 14.22.

We can also see that BAC currently has a PEG ratio of 2.26. 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 industry currently had an average PEG ratio of 2.26 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 225, which puts it in the bottom 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.

To follow BAC in the coming trading sessions, be sure to utilize Zacks.com.


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