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Regions Financial Corp RF

Morningstar Rating
$18.23 −0.10 (0.55%)
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Company Report

NYCB Was Uniquely Risky; We Would Not Read Too Much Into the Entire Banking Sector

Our thesis on the U.S. banks following the Silicon Bank fallout was that all of the banks we covered, except for First Republic (which we downgraded to a $3 fair value estimate on March 20, 2023, and a $0 fair value on April 27, 2023), would be able to weather the storm. We believed that banks in trouble were in uniquely risky positions. We believe this thesis has largely held up, and sorting through banks based on their unique risk profiles remains necessary and valuable. To the extent that the market is selling off all banks because of what has happened to NYCB, we think there could be opportunities once again while acknowledging the significant time horizon risk (how long does it take for the banks to prove to the market they are fine) and the choppy waters that could occur in the meantime (we expect more commercial real estate related loan losses in the future).

Price vs Fair Value

RF is trading at a 13% discount.
Price
$18.33
Fair Value
$75.00
Uncertainty
High
1-Star Price
$84.67
5-Star Price
$27.70
Economic Moat
Dngg
Capital Allocation
Rxnfsjntx

Bulls Say, Bears Say

Bulls

A strong economy and higher rates are positives for the banking sector and are much preferable to the zero-rate environment banks were previously stuck in.

Bears

There are few positive catalysts left for the banks. Funding costs are running higher, net interest income has likely peaked, higher regulatory scrutiny is likely, and a potential recession with higher charge-offs may be around the corner.

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News

Trading Information

Previous Close Price
$18.33
Day Range
$18.0418.60
52-Week Range
$13.7223.58
Bid/Ask
$18.11 / $18.23
Market Cap
$16.84 Bil
Volume/Avg
9.0 Mil / 9.1 Mil

Key Statistics

Price/Earnings (Normalized)
7.51
Price/Sales
2.27
Dividend Yield (Trailing)
4.80%
Dividend Yield (Forward)
5.24%
Total Yield
4.83%

Company Profile

Regions Financial is a regional bank headquartered in Alabama, with branches primarily in the Southeastern and Midwestern United States. Regions primarily provides traditional commercial and retail banking and also offers mortgage services, asset-management, wealth-management, securities brokerage, and trust services.
Sector
Financial Services
Industry
Banks - Regional
Stock Style Box
Mid Value
Total Number of Employees
20,257

Competitors

Valuation

Metric
RF
WFC
PNC
Price/Earnings (Normalized)
7.518.9710.25
Price/Book Value
1.071.051.15
Price/Sales
2.272.192.76
Price/Cash Flow
5.106.536.92
Price/Earnings
RF
WFC
PNC

Financial Strength

Metric
RF
WFC
PNC
Quick Ratio
Current Ratio
Interest Coverage
Quick Ratio
No chart available

Profitability

Metric
RF
WFC
PNC
Return on Assets (Normalized)
1.42%1.04%1.13%
Return on Equity (Normalized)
15.20%12.17%14.50%
Return on Invested Capital (Normalized)
Return on Assets
RF
WFC
PNC
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Economic Moat
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PNC
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ISNPY
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TFC
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LYG
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BBD
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DB
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