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Regions Financial Corporation (RF), headquartered in Birmingham, Alabama, is one of the largest full-service providers of consumer and commercial banking, wealth management, and mortgage products and services. Valued at $17.40 billion by market cap, the company services customers across the South, Midwest, and Texas. Through its subsidiary, Regions Bank, RF operates approximately 1,250 banking offices and more than 2,000 ATMs.
Shares of this leading regional bank have underperformed the broader market considerably over the past year. RF has gained 7.1% over this time frame, while the S&P 500 Index ($SPX) has rallied 24.5%. In 2024, shares of RF are down 1.7%, while the SPX is up 9.8% on a YTD basis.
Narrowing the focus, RF’s underperformance is also apparent compared to the US Regional Banks iShares ETF (IAT). The exchange-traded fund has gained about 26% over the past year.
Shares of RF fell more than 3% after Citigroup downgraded Banof OZK to “Sell” from “Buy” with a target price of $37, citing loan worries. On Apr. 19, RF shares fell more than 2% after the company forecasted Q2 net interest income to be flat to down -2% compared to Q1.
For the current fiscal year, ending in December, analysts expect RF to report an EPS decline of 12.5% to $1.96 on a diluted basis. The company’s earnings surprise history is disappointing. It missed the consensus estimate in three of the last four quarters while beating the forecast on another occasion.
Among the 26 analysts covering RF stock, the consensus rating is a “Moderate Buy.” That’s based on eight “Strong Buy” ratings, one “Moderate Buy,” 16 “Holds,” and one “Strong Sell.”
This configuration is slightly more bullish than three months ago, with seven suggesting “Strong Buy.”
The mean price target of $21.23 represents an 11.7% premium to RF’s current price levels. The Street-high price target of $25 suggests an upside potential of 31.6%.
On the date of publication, Dipanjan Banchur did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
