4 Reasons to Add First BanCorp. (FBP) to Your Portfolio Now
First BanCorp. FBP stock looks like an attractive investment option now. Though the U.S. regional banking crisis hurt investor sentiments, investors have regained some confidence in the industry now. The Federal Reserve paused rate hikes this month but has hinted at increasing rates later this year.
Supported by higher interest rates and decent loan demand, FBP’s top line is expected to improve in the near term. Thus, driven by strong fundamentals and solid growth prospects, the company appears to be a promising investment option right now.
Moreover, analysts are optimistic regarding the company’s earnings growth potential. The Zacks Consensus Estimate for FBP’s 2023 earnings has been revised 3.5% upward over the past 60 days. It currently carries a Zacks Rank #2 (Buy).
Looking at its price performance, shares of First BanCorp have gained 8.2% over the past three months compared with the industry’s 6.3% growth.
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Mentioned below are some other factors that make First BanCorp. a stock a solid pick right now.
Earnings Per Share (EPS) Growth: In the last three to five years, the company witnessed EPS growth of 29%, higher than the industry’s average of 12%. While earnings are projected to decline by 6.3% in 2023, the trend will likely reverse thereafter. In 2024, the company’s earnings are expected to witness growth of 3.4%.
Revenue Strength: First BanCorp.’s revenues witnessed a CAGR of 8.7% over the last five years (2018-2022), with the upward trend continuing in the first quarter of 2023. Revenues are expected to keep improving in the near term. In 2023 and 2024, the company’s top line is expected to witness growth of 3.9% and 5.3%, respectively.
Superior Return on Equity (ROE): The company’s ROE of 21.11% is higher than the industry average of 12.15%. This shows that it reinvests its cash more efficiently than its peers.
Valuation Favorable: The FBP stock looks undervalued right now with respect to its price-to-cash flow (P/CF) and price-to-earnings (P/E) ratios. It has a P/CF ratio of 6.76, which is below the industry average of 7.04. Moreover, its P/E (F1) ratio of 8.36 compares slightly favorably with the industry’s 8.75.
Also, First BanCorp. has a Value Score of B. The Value Style Score condenses all valuation metrics into one actionable score, helping investors steer clear of 'value traps' and identify stocks that are truly trading at a discount. Our research shows that stocks with a Value Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best upside potential.
Other Stocks Worth A Look
A couple of other top-ranked stocks from the same space are Trustmark Corporation TRMK and Home Bancorp, Inc. HBCP.
Earnings estimates for TRMK have been revised 11% upward for 2023 over the past 60 days. The company’s share price has declined 13.4% over the past three months. TRMK currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Home Bancorp’s earnings estimates have been revised upward by 1.5% for the current year over the past 60 days. In three months’ time, HBCP’s share price has declined 4.9%. The company carries a Zacks Rank #2 at present.
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First BanCorp. (FBP) : Free Stock Analysis Report
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