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

Zacks Equity Research
In the latest trading session, Adobe Systems (ADBE) closed at $275.45, marking a -1.09% move from the previous day.

Bank of America (BAC) closed the most recent trading day at $29.65, moving -0.57% from the previous trading session. This move lagged the S&P 500's daily loss of 0.01%. Meanwhile, the Dow lost 0.1%, and the Nasdaq, a tech-heavy index, added 0.12%.

Heading into today, shares of the nation's second-largest bank had gained 2.44% over the past month, outpacing the Finance sector's gain of 1.53% and the S&P 500's gain of 2.24% in that time.

Investors will be hoping for strength from BAC as it approaches its next earnings release, which is expected to be April 16, 2019. The company is expected to report EPS of $0.65, up 4.84% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $23.43 billion, up 1.32% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.84 per share and revenue of $94.15 billion. These totals would mark changes of +8.81% and +3.18%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for BAC. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. The Zacks Consensus EPS estimate has moved 0.14% lower within the past month. BAC is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, BAC is holding a Forward P/E ratio of 10.49. For comparison, its industry has an average Forward P/E of 11.07, which means BAC is trading at a discount to the group.

Meanwhile, BAC's PEG ratio is currently 1.31. 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. The Banks - Major Regional was holding an average PEG ratio of 1.32 at yesterday's closing price.

The Banks - Major Regional industry is part of the Finance sector. This group has a Zacks Industry Rank of 102, putting it in the top 40% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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