Bank of America (BAC) Gains But Lags Market: What You Should Know

In the latest trading session, Bank of America (BAC) closed at $28.54, marking a +0.49% move from the previous day. This move lagged the S&P 500's daily gain of 1.09%. Meanwhile, the Dow gained 1.13%, and the Nasdaq, a tech-heavy index, added 1.51%.

Heading into today, shares of the nation's second-largest bank had gained 2.12% over the past month, lagging the Finance sector's gain of 2.32% and outpacing the S&P 500's gain of 1.92% in that time.

Wall Street will be looking for positivity from BAC as it approaches its next earnings report date. This is expected to be January 16, 2019. On that day, BAC is projected to report earnings of $0.64 per share, which would represent year-over-year growth of 36.17%. Our most recent consensus estimate is calling for quarterly revenue of $22.39 billion, up 9.55% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.55 per share and revenue of $91.18 billion. These totals would mark changes of +39.34% and +4.38%, respectively, from last year.

Any recent changes to analyst estimates for BAC should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. The Zacks Consensus EPS estimate remained stagnant within the past month. BAC is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that BAC has a Forward P/E ratio of 11.14 right now. For comparison, its industry has an average Forward P/E of 11.62, which means BAC is trading at a discount to the group.

It is also worth noting that BAC currently has a PEG ratio of 1.39. 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 1.19 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 97, which puts it in the top 38% 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.

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

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