Bank of America (BAC) Dips More Than Broader Markets: What You Should Know

This story originally appeared on Zacks

In the latest trading session, Bank of America (BAC) closed at $44.20, marking a -1.82% move from the previous day. This change lagged the S&P 500’s daily loss of 0.24%. Elsewhere, the Dow lost 0.49%, while the tech-heavy Nasdaq lost 0.04%.

Coming into today, shares of the nation’s second-largest bank had lost 1.85% in the past month. In that same time, the Finance sector gained 0.89%, while the S&P 500 gained 0.73%.

Investors will be hoping for strength from Bank of America as it approaches its next earnings release, which is expected to be April 18, 2022. On that day, Bank of America is projected to report earnings of $0.79 per share, which would represent a year-over-year decline of 8.14%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $23.44 billion, up 2.69% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.28 per share and revenue of $93.81 billion. These totals would mark changes of -8.12% and +5.27%, respectively, from last year.

Any recent changes to analyst estimates for Bank of America should also be noted by investors. These revisions help to show the ever-changing nature of 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 1.24% higher. Bank of America is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, Bank of America is holding a Forward P/E ratio of 13.71. This represents a premium compared to its industry’s average Forward P/E of 13.58.

Investors should also note that BAC has a PEG ratio of 1.96 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate. The Banks – Major Regional industry currently had an average PEG ratio of 1.7 as of yesterday’s close.

The Banks – Major Regional industry is part of the Finance sector. This group has a Zacks Industry Rank of 85, putting it in the top 34% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

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

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