F.N.B. Corporation ( FNB Quick Quote FNB - Free Report) is well-positioned for organic and inorganic growth, given the solid balance sheet and liquidity position and gradual improvement in the operating backdrop. Also, its efforts to digitize operations will support growth. In addition, analysts are bullish on the stock’s earnings growth prospects. Over the past 60 days, the Zacks Consensus Estimate for earnings has moved 1.8% and 2.3% north for 2022 and 2023, respectively. FNB currently carries a Zacks Rank #2 (Buy). Over the past six months, shares of F.N.B. Corp have rallied 8.1%, significantly outperforming the industry’s 1.8% rise. Image Source: Zacks Investment Research
Here are few factors that make FNB stock worth betting on now:
Earnings Growth: F.N.B. Corp has witnessed earnings growth of 4.1% in the past three to five years. Though the company’s earnings are projected to decline 7.3% this year, it is expected to rebound and increase 13.7% in 2023. Moreover, F.N.B. Corp has an impressive earnings surprise history. The company's earnings have surpassed the Zacks Consensus Estimate in three of the trailing four quarters, the average beat being 7.93%. Revenue Strength: F.N.B. Corp is focused on its revenue growth strategy. Though net revenues declined in 2021 due to lower rates and a dismal lending scenario, it witnessed a CAGR of 3% over the last five years (2017-2021). The company is also undertaking strategic actions to improve non-interest income by enhancing its product suite and expanding services. Robust economic growth, strategic expansion moves like opportunistic de novo expansion and a gradual rise in loan demand will support the top line in the quarters ahead. The company’s sales are expected to grow 6% for 2022 and 9.2% for 2023. Improvement in Operating Efficiency: Under its “clicks-to-bricks” strategy, F.N.B. Corp has been integrating mobile, online and in-branch modes for a seamless and convenient banking experience. This helped it overcome a challenging operating backdrop in 2020 when people's movements were restricted due to the COVID-19 pandemic. The company is witnessing a substantial rise in digital traffic over the past couple of years, with clients relying heavily on online tools to do banking transactions. The company has been building on its ongoing investments in sophisticated technology to enhance customer experience, including integrating its eStore shopping tool into the FNB Direct mobile app in November 2021. Also, in 2020, the company increased its ATMs network by almost 30% to 800. Driven by increased digital usage, the company has been consolidating its branch network, leading to cost savings. These initiatives are expected to keep improving its operating efficiency. Strong Balance Sheet: As of Dec 31, 2021, the company had total debt worth $2.22 billion and cash and cash equivalents of $3.49 billion. Also, FNB’s times interest earned ratio of 10.8 at the end of 2021 improved. Thus, given its earnings strength and a solid liquidity position, it is expected to be able to continue meeting debt obligations in the near term, even if the economic situation worsens. Synergies From Opportunistic Buyouts: Acquisitions remain a major portion of F.N.B. Corp’s business expansion plan and top line and footprint diversification efforts. Since 2005, the company has successfully integrated 15 buyouts. Also, FNB acquired several branches from other banks. This January, it acquired Howard Bancorp in an all-stock deal. This, along with prior deals, will continue to be accretive to the company’s earnings. Steady Capital Deployments: F.N.B. Corp has been regularly paying a quarterly dividend of 12 cents per share, which currently yields 3.66%. Apart from this, it has a share repurchase program in place. As of Dec 31, 2021, nearly 65 million shares remained under the plan. Given the company’s strong balance sheet and liquidity positions, its capital deployments seem sustainable. Other Stocks to Consider
A couple of other stocks from the finance space worth a look are
Associated Banc-Corp ( ASB Quick Quote ASB - Free Report) and Commerce Bancshares, Inc. ( CBSH Quick Quote CBSH - Free Report) . Both ASB and CBSH carry a Zacks Rank #2. You can see . the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here The Zacks Consensus Estimate for Associated Banc-Corp’s current-year earnings has been revised 2.3% upward over the past 30 days. ASB’s shares have risen 5.9% over the past six months. Commerce Bancshares recorded a marginal upward earnings estimate revision for 2022 over the past 30 days. Over the past six months, CBSH stock has gained 7.1%.