Bank of America (BAC) Is Considered a Good Investment by Brokers: Is That True?

Brokerage Recommendations and ABR - Bank of America (BAC) currently has an average brokerage recommendation (ABR) of 1.48, which approximates between Strong Buy and Buy on a scale of 1 to 5 [2] - Out of 25 recommendations, 17 are Strong Buy (68%) and 4 are Buy (16%) [2] - The ABR suggests buying Bank of America, but relying solely on it for investment decisions may not be ideal due to the positive bias in brokerage recommendations [4][5] - Brokerage firms issue five "Strong Buy" recommendations for every "Strong Sell," indicating a strong positive bias [5] Zacks Rank and Earnings Estimate Revisions - Zacks Rank is a proprietary stock rating tool that categorizes stocks into five groups, ranging from Zacks Rank 1 (Strong Buy) to Zacks Rank 5 (Strong Sell) [7] - Unlike ABR, Zacks Rank is based on earnings estimate revisions and has a strong correlation with near-term stock price movements [10] - Zacks Rank is displayed in whole numbers (1 to 5), while ABR is displayed in decimals [8] - Zacks Rank is more timely than ABR, as it quickly reflects changes in earnings estimates [11] Bank of America's Investment Potential - The Zacks Consensus Estimate for Bank of America's current year earnings has increased by 0.2% over the past month to $3.67 [12] - Analysts' growing optimism about the company's earnings prospects, indicated by upward revisions in EPS estimates, could drive the stock higher in the near term [12] - Bank of America has a Zacks Rank 2 (Buy), which aligns with its Buy-equivalent ABR, making it a potentially attractive investment [13]