First Financial Bancorp. (NASDAQ:FFBC), operating in the financial services industry based in United States, received a lot of attention from a substantial price movement on the NasdaqGS over the last few months, increasing to $29.58 at one point, and dropping to the lows of $22.4. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether First Financial Bancorp’s current trading price of $24.44 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at First Financial Bancorp’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What’s the opportunity in First Financial Bancorp?
According to my valuation model, First Financial Bancorp seems to be fairly priced at around 5.62% above my intrinsic value, which means if you buy First Financial Bancorp today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $23.14, there’s only an insignificant downside when the price falls to its real value. So, is there another chance to buy low in the future? Given that First Financial Bancorp’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
What does the future of First Financial Bancorp look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. First Financial Bancorp’s earnings over the next few years are expected to increase by 64%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? It seems like the market has already priced in FFBC’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping an eye on FFBC, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on First Financial Bancorp. You can find everything you need to know about First Financial Bancorp in the latest infographic research report. If you are no longer interested in First Financial Bancorp, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.