How reliable are BAC's EPS forecasts historically?

Bank of America's (BAC) EPS forecasts have shown a general trend of analysts adjusting their estimates downward. This suggests that while there is some uncertainty, analysts are becoming more conservative in their expectations. Here's a detailed analysis: 1. **Recent Analyst Estimates**: - The most recent consensus estimate for BAC's EPS is $0.77 for the quarter ending December 31, 2024. - Analysts have projected a year-over-year decline of 3.61% in EPS, with an estimated $0.80 per share for the upcoming quarter. 2. **Historical Adjustments**: - Over the past 30 days, the consensus EPS projection for BAC has moved 0.58% lower. - This downward revision could indicate a lack of confidence in BAC's short-term performance or reflect broader market trends influencing analyst expectations. 3. **Comparison with Actual Performance**: - BAC's actual EPS for the previous quarter was $0.82, which was slightly above the analyst estimate of $0.76. - The bank's performance in the previous quarter exceeded expectations, with an EPS surprise of $0.06. 4. **Market Performance and Revisions**: - BAC's stock has experienced a loss of 1.5% over the previous month, underperforming the Finance sector but outperforming the S&P 500. - Positive revisions in estimates would suggest analysts' confidence in the company's business performance and profit potential. 5. **Intrinsic Value Assessment**: - The Discounted Earnings (DCF) model by GuruFocus suggests an intrinsic value of $85.20 for BAC, with a significant undervaluation margin of 51.12%. - This DCF analysis uses EPS without Non-Recurring Items (NRI) and assumes a growth rate of 17.20% for the growth stage. In conclusion, while BAC's EPS forecasts have shown some adjustments downward, the bank's actual performance has occasionally exceeded analyst expectations. The intrinsic value assessment indicates a potential undervaluation, which could be indicative of positive long-term prospects. Investors should monitor upcoming earnings reports and analyst revisions closely to refine their views on BAC's reliability of EPS forecasts and its overall financial performance.