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BofA (BAC) Gains 6.8% in Q1: More Upside Left for the Stock?
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Financial stocks remained a favorite among investors over the last three months. One such major banking stock – Bank of America Corporation (BAC - Free Report) – jumped 6.8% in first-quarter 2017. It significantly outpaced the Zacks categorized Major Regional Banks industry’s gain of 1.6%.
This outperformance depicts optimism over the gradually improving operating environment and rate hike scenario. Further, potential lesser regulations and lower rates as promised by President Donald Trump bodes well for BofA.
Apart from this, BofA is part of the Major Regional Banks industry, which has a Zacks Industry Rank #42 (top 16%).
Moreover, the stock seems undervalued on the basis of its Price-to-Earnings (P/E) and Price-to-Book (P/B) ratios. BofA has a P/E ratio of 13.47 compared with the industry average of 14.43. Also, the company’s P/B ratio of 0.99 is below the industry average of 1.42.
Further, the estimates for this Zacks Rank #2 (Buy) stock was revised upward. Over the last 60 days, the Zacks Consensus Estimate increased 1.2% and 1.5% for 2017 and 2018, respectively.
Now going to the fundamentals, BofA’s earnings have grown 19.6% annually over the last three to five years. Earnings growth is anticipated to continue in the near term as well. The company’s projected EPS (earnings per share) growth (F1/F0) is 16.8% for 2017 and (F2/F1) 17.5% for 2018.
Further, BofA is well positioned to benefit from improvement in the rate environment. Also, management is optimistic about favorable impact of the rate hike on margins in the quarters ahead, with a continued rise in loan and deposit balances.
Additionally, BofA’s cost-saving efforts help it in improving overall efficiency and simplifying operations. The company is on track to reach its expense target of nearly $53 billion by 2018.
SunTrust witnessed an upward earnings estimate revision of nearly 1% for 2017, over the past 60 days. Its share price jumped 26.3%, over the last six months.
SVB Financial's Zacks Consensus Estimate for 2017 was revised almost 1% upward, over the past 60 days. Its share price increased 70%, over the last six months.
Hancock Holding witnessed an upward earnings estimate revision of 1% for 2017, over the past 60 days. Over the last six months, its share price rose 41.4%
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
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BofA (BAC) Gains 6.8% in Q1: More Upside Left for the Stock?
Financial stocks remained a favorite among investors over the last three months. One such major banking stock – Bank of America Corporation (BAC - Free Report) – jumped 6.8% in first-quarter 2017. It significantly outpaced the Zacks categorized Major Regional Banks industry’s gain of 1.6%.
This outperformance depicts optimism over the gradually improving operating environment and rate hike scenario. Further, potential lesser regulations and lower rates as promised by President Donald Trump bodes well for BofA.
Apart from this, BofA is part of the Major Regional Banks industry, which has a Zacks Industry Rank #42 (top 16%).
Moreover, the stock seems undervalued on the basis of its Price-to-Earnings (P/E) and Price-to-Book (P/B) ratios. BofA has a P/E ratio of 13.47 compared with the industry average of 14.43. Also, the company’s P/B ratio of 0.99 is below the industry average of 1.42.
Further, the estimates for this Zacks Rank #2 (Buy) stock was revised upward. Over the last 60 days, the Zacks Consensus Estimate increased 1.2% and 1.5% for 2017 and 2018, respectively.
Now going to the fundamentals, BofA’s earnings have grown 19.6% annually over the last three to five years. Earnings growth is anticipated to continue in the near term as well. The company’s projected EPS (earnings per share) growth (F1/F0) is 16.8% for 2017 and (F2/F1) 17.5% for 2018.
Further, BofA is well positioned to benefit from improvement in the rate environment. Also, management is optimistic about favorable impact of the rate hike on margins in the quarters ahead, with a continued rise in loan and deposit balances.
Additionally, BofA’s cost-saving efforts help it in improving overall efficiency and simplifying operations. The company is on track to reach its expense target of nearly $53 billion by 2018.
Other Stocks to Consider
Some other banking stocks worth a look include SunTrust Banks, Inc. (STI - Free Report) , SVB Financial Group and Hancock Holding Company , each holding a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
SunTrust witnessed an upward earnings estimate revision of nearly 1% for 2017, over the past 60 days. Its share price jumped 26.3%, over the last six months.
SVB Financial's Zacks Consensus Estimate for 2017 was revised almost 1% upward, over the past 60 days. Its share price increased 70%, over the last six months.
Hancock Holding witnessed an upward earnings estimate revision of 1% for 2017, over the past 60 days. Over the last six months, its share price rose 41.4%
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>