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Headquartered in Birmingham, Alabama, Regions Financial Corporation (RF) is a financial services provider in the banking industry. With a strong regional presence and a market cap of $23.7 billion, Regions delivers comprehensive banking solutions, including retail and commercial banking, wealth management, and mortgage services.
Shares of this leading regional bank have outperformed the broader market considerably over the past year. The stock gained 65% over this time frame, while the S&P 500 Index ($SPX) has rallied 32.3%. In 2024 alone, shares of RF are up 35.6%, while the SPX is up 24.7% on a YTD basis.
Narrowing the focus, RF’s outperformance looks even more pronounced compared to the SPDR S&P Regional Banking ETF (KRE). The exchange-traded fund has gained about 48% over the past year. Moreover, the ETF’s 25.6% gains on a YTD basis lagged behind the stock’s gains over the same time frame.
Regions Financial has outperformed the broader market and its peers, driven by strong financial performance and well-executed strategic initiatives. However, the stock experienced a slight dip following its Q3 earnings release on Oct. 18. The company delivered an adjusted EPS of $0.57, exceeding consensus estimates of $0.53, while quarterly revenue reached $1.79 billion, a 3.4% year-over-year increase that matched analyst expectations.
For the current fiscal year, ending in December, analysts expect RF to report an EPS decline of 6.3% to $2.10 on a diluted basis. The company’s earnings surprise history is mixed. It surpassed the consensus estimate in three of the last four quarters while missing the forecast on one other occasion.
Among the 24 analysts covering RF stock, the consensus rating is a “Moderate Buy.” That’s based on 11 “Strong Buy” ratings, two “Moderate Buys,” 10 “Holds,” and one “Strong Sell.”
This configuration is more bullish than three months ago when eight analysts suggested a "Strong Buy."
Yesterday, Wells Fargo's (WFC) Mike Mayo raised Regions Financial’s price target to $28 from $24, maintaining an “Equal-Weight” rating, citing potential benefits from a post-election regulatory shift, increased EPS estimates, greater capital flexibility, and a possible resurgence in bank mergers.
The mean price target of $26.34 represents a marginal premium to RF’s current price levels. The Street-high price target of $30 suggests an upside potential of 14.2%.
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