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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 at $21.10 in the latest trading session, marking a +0.33% move from the prior day. The stock lagged the S&P 500's daily gain of 1.15%. Meanwhile, the Dow gained 2.39%, and the Nasdaq, a tech-heavy index, lost 0.45%.

Heading into today, shares of the nation's second-largest bank had lost 32.34% over the past month, lagging the Finance sector's loss of 31.3% and the S&P 500's loss of 24.07% in that time.

Investors will be hoping for strength from BAC as it approaches its next earnings release, which is expected to be April 15, 2020. On that day, BAC is projected to report earnings of $0.73 per share, which would represent year-over-year growth of 4.29%. Our most recent consensus estimate is calling for quarterly revenue of $23.11 billion, up 0.45% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.92 per share and revenue of $90.47 billion, which would represent changes of +6.18% and -0.85%, respectively, from the prior year.

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.

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 4.32% lower. 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 7.2 right now. This represents a discount compared to its industry's average Forward P/E of 7.37.

It is also worth noting that BAC currently has a PEG ratio of 1.03. 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 0.93 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 200, which puts it in the bottom 22% 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.

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


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