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Birmingham, Alabama-based Regions Financial Corporation (RF) is a financial holding company that offers a range of banking and related products and services to individual and corporate customers. Valued at a market cap of $22.6 billion, the company provides retail, commercial, and mortgage banking, as well as asset management, wealth management, securities brokerage, trust services, and mergers and acquisitions advisory services.
This regional bank has outpaced the broader market over the past 52 weeks. Shares of RF have surged 23.4% over this time frame, while the broader S&P 500 Index ($SPX) has gained 21.5%. On a YTD basis, the stock is up 7.1%, in line with SPX’s gains.
Zooming in further, RF has also outperformed the iShares U.S. Regional Banks ETF’s (IAT) 13.6% rise over the past 52 weeks and 1.3% drop on a YTD basis.
On Jul. 18, shares of RF soared 6.1% after its better-than-expected Q2 earnings release. Due to higher net interest and non-interest incomes, the company’s overall adjusted revenue improved 7% year-over-year to $1.9 billion, topping consensus estimates by 3.2%. Further, its adjusted earnings of $0.60 per share advanced 13.2% from the same period last year and came in 7.1% above Wall Street estimates. Solid deposit growth, disciplined loan production, and firm performance across its fee-based businesses, particularly treasury management and wealth management, supported its impressive Q2 performance.
For the current fiscal year, ending in December, analysts expect RF’s EPS to grow 9.4% year over year to $2.32. The company’s earnings surprise history is promising. It topped the consensus estimates in each of the last four quarters.
Among the 25 analysts covering the stock, the consensus rating is a "Moderate Buy” which is based on nine “Strong Buy,” two "Moderate Buy,” 13 “Hold,” and one “Strong Sell” rating.
This configuration is slightly more bullish than three months ago, with eight analysts suggesting a “Strong Buy” rating.
On Aug. 1, JPMorgan Chase & Co. (JPM) analyst Vivek Juneja maintained a "Hold" rating on RF with a price target of $27.50, implying a 9.2% potential upside from the current levels.
The mean price target of $28.27 represents a 12.3% premium from RF’s current price levels, while the Street-high price target of $33 suggests an upside potential of 31.1%.
