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

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Bank of America (BAC - Free Report) closed the most recent trading day at $27.81, moving +1.13% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.65%. Elsewhere, the Dow gained 0.79%, while the tech-heavy Nasdaq added 1.01%.

Heading into today, shares of the nation's second-largest bank had lost 8.33% over the past month, lagging the Finance sector's loss of 4.88% and the S&P 500's loss of 6.82% in that time.

BAC will be looking to display strength as it nears its next earnings release, which is expected to be January 16, 2019. In that report, analysts expect BAC to post earnings of $0.65 per share. This would mark year-over-year growth of 38.3%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $22.39 billion, up 9.55% from the year-ago period.

BAC's full-year Zacks Consensus Estimates are calling for earnings of $2.55 per share and revenue of $91.19 billion. These results would represent year-over-year changes of +39.34% and +4.4%, respectively.

It is also important to note the 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.

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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.1% higher. BAC is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that BAC has a Forward P/E ratio of 10.79 right now. This valuation marks a discount compared to its industry's average Forward P/E of 11.37.

It is also worth noting that BAC currently has a PEG ratio of 1.35. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. BAC's industry had an average PEG ratio of 1.2 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 71, which puts it in the top 28% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.




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