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4 Reasons to Invest in First Bancorp (FBNC) Stock Right Now

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Given the expectation of more rate hikes this year (in addition to the ones in March and May), bank stocks are expected to benefit. Thus, investing in banks seems to be a good decision right now. One such bank is First Bancorp (FBNC - Free Report) , which looks like an attractive pick right now, given its solid fundamentals and good growth prospects.

The company has been witnessing upward earnings estimate revisions of late, reflecting analysts’ optimism regarding its earnings growth potential. Over the past 60 days, the Zacks Consensus Estimate for First Bancorp’s 2022 earnings has been revised 2.6% upward. Thus, the company currently carries a Zacks Rank #2 (Buy).

So far this year, shares of FBNC have lost 19.8% compared with the industry’s decline of 10%.

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

Nevertheless, given the strong Zacks Rank and positive earnings estimate revisions, the stock price is expected to improve in the near term.

Mentioned below are some aspects that make First Bancorp a solid pick now.

Earnings Growth: The company’s earnings witnessed growth of 15.1% in the last three-five years, higher than the industry’s growth of 14.1%. The uptrend is expected to continue in the near term, reflected by the company’s projected earnings per share (EPS) growth rate of 9.9% for 2022 and 6.5% for 2023.

Revenue Strength: First Bancorp’s revenues witnessed a compound annual growth rate of 16% over the last six years (2016-2021). The top line is expected to continue to grow in the near term, which can be seen from its projected sales growth rates of 20.3% for 2022 and 6.9% for 2023.

Strong Leverage: First Bancorp currently has a debt/equity ratio of 0.06, which compares favorably with the industry average of 0.13. This shows that the company will likely be more financially stable than its peers, even in adverse economic conditions.

Favorable Valuation: First Bancorp stock looks undervalued compared with the broader industry. Its price/earnings ratio is below the respective industry average. FBNC has a P/E (F1) ratio of 9.17 compared with the industry average of 10.86.

Also, the stock has a Value Score of B. Our research shows that stocks with a Value Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best upside potential.

Other Key Picks

A couple of other top-ranked stocks from the finance space are Gladstone Capital Corporation (GLAD - Free Report) and Main Street Capital Corporation (MAIN - Free Report) . GLAD and MAIN currently carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for Gladstone Capital’s current fiscal year’s earnings has been revised 8.1% upward over the past 60 days. Over the past year, GLAD’s share price has increased 0.2%.

Main Street Capital’s current-year earnings estimates have been revised 1.4% upward over the past 60 days. MAIN’s shares have lost 12.7% over the past year.


In-Depth Zacks Research for the Tickers Above


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Main Street Capital Corporation (MAIN) - free report >>

First Bancorp (FBNC) - free report >>

Gladstone Capital Corporation (GLAD) - free report >>

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