Bank of America (BAC) Stock Falls on Market Gains: Here’s Why

In the latest trading session, Bank of America (BAC) closed at $43.89, down -0.63% from the previous day. The stock’s performance lagged the S&P 500’s daily gain of 0.73%. Meanwhile, the Dow gained 0.16% and the Nasdaq, a tech-heavy index, gained 0.98%.

Heading into today, shares of the nation’s second-largest bank had lost 6.02% over the past month, lagging the Financials sector’s loss of 2.93% and the S&P 500’s gain of 0.34% in that time.

The investment community will be paying close attention to Bank of America’s earnings performance in its upcoming release. The company is expected to report earnings per share of $0.79, up 12.86% from the prior-year quarter. Meanwhile, our most recent consensus estimate is calling for revenue of $25.25 billion, up 14.98% from the prior-year quarter.

For the full-year period, the Zacks Consensus Estimates are projecting earnings of $3.27 per share and revenue of $101.82 billion, representing year-over-year shifts of -4.39% and +3.29%, respectively corresponds.

It is also important to note recent changes to analyst estimates for Bank of America. These revisions help demonstrate the ever-changing nature of near-term business trends. Therefore, positive estimate changes mean analysts are optimistic about the company’s business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable valuation model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an admirable track record of superior performance, independently audited, with #1 stocks generating an average annual return of +25% generated. Over the past 30 days, the Zacks Consensus EPS estimate has decreased 0.05%. Currently, Bank of America has a Zacks Rank of #3 (Hold).

Bank of America is currently valued at a forward P/E ratio of 13.52. This represents a discount compared to its industry’s average Forward P/E of 16.43.

Investors should also note that BAC currently has a PEG ratio of 1.35. This popular metric is similar to the widely known P/E ratio, except that the PEG ratio also takes into account the company’s expected earnings growth rate. The average PEG ratio for the Finance and Investment Banking industry was 1.37 at the close yesterday.

The finance and investment banking industry is part of the financial sector. This industry currently has a Zacks Industry Rank of 52, putting it in the top 21% of all 250+ industries.

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