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Bank of America Corp (NYSE:) and Wells Fargo & Co (NYSE:WFC), both part of the Zacks Banks – Major Regional industry, show potential for surpassing earnings estimates in their upcoming quarterly reports, according to Zacks Equity Research on Monday.
Bank of America, the nation’s second-largest bank, has shown a consistent streak of surpassing earnings estimates in the last two quarters. The company has topped estimates by an average of 11.87% during this period. In its last reported quarter, Bank of America posted earnings of $0.88 per share, beating the Zacks Consensus Estimate of $0.84 per share by 4.76%. In the previous quarter, it outperformed expectations by delivering earnings of $0.94 per share against an estimate of $0.79 per share, a surprise of 18.99%.
According to InvestingPro’s real-time metrics, Bank of America has a market capitalization of 212.09B USD and revenue growth of 5.63%. The company’s P/E ratio stands at 7.6, reflecting a low P/E ratio relative to near-term earnings growth, an InvestingPro Tip that suggests the company is undervalued. Another noteworthy point from InvestingPro Tips is that Bank of America has raised its dividend for 9 consecutive years, showing a strong commitment to returning capital to shareholders.
The Zacks Earnings ESP (Expected Surprise Prediction) for Bank of America is currently positive at +2.59%, suggesting analysts have grown bullish on its near-term earnings potential. The company’s next earnings report is expected to be released on October 17, 2023.
Similarly, Wells Fargo, the biggest U.S. mortgage lender, has demonstrated a robust streak of surpassing earnings estimates in the last two quarters, topping estimates by an average of 7.83%. In the most recent quarter, Wells Fargo reported earnings of $1.25 per share against an expectation of $1.15 per share, a surprise of 8.70%. In the previous quarter, it reported earnings of $1.23 per share against a consensus estimate of $1.15 per share, a surprise of 6.96%.
InvestingPro data shows that Wells Fargo has a market capitalization of 144.96B USD with a P/E ratio of 9.88. Despite a slight decrease in revenue growth, the company has been aggressively buying back shares, a strategic move to increase shareholder value, as pointed out by InvestingPro Tips.
The Zacks Earnings ESP for Wells Fargo stands at +2.97% at the moment, indicating that analysts are optimistic about its near-term earnings potential. The company’s next earnings report is expected to be released on October 13, 2023.
Zacks’ research shows that stocks with a positive Earnings ESP and a Zacks Rank #3 (Hold) or better tend to produce a positive surprise nearly 70% of the time. This suggests that if an investor has ten stocks with this combination, as many as seven could beat the consensus estimate.
For more in-depth insights and valuable tips like these, consider exploring the InvestingPro platform here. With InvestingPro, you can access a wealth of additional tips and real-time metrics for a wide range of companies.
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