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Why Cullen Frost (CFR) Stock Has Plenty of Upside Left
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Cullen/Frost Bankers, Inc.’s (CFR - Free Report) shares have gained nearly 46.3% so far this year, outpacing the Zacks categorized Southwest Banks industry’s gain of 44.3%. The company’s consistent top-line growth, along with increasing loans and deposits balances, has contributed to the stock’s momentum, despite the expanding cost base.
The company has witnessed upward trend in its earnings estimate revision for the current year. Over the last 60 days, the Zacks Consensus Estimate for the stock has moved up 3.1% to $4.64. This positive earnings estimate revision suggests that analysts are becoming more optimistic on the stock’s performance in the near-term. Also, the stock sports a Zacks Rank #1 (Strong Buy), which underscores the stock’s outperformance.
Looking at the fundamentals, consistent revenue growth remains a key tailwind for the company. With the recent Fed rate hike, the company’s non-interest bearing deposits, a major low-cost funding source, will positively contribute to net interest income. Notably, the company offers a medium rate for funds as it has a relational deposit base, which provides an opportunity to compete on price.
The company is based in Texas, which is a well-diversified economy with low-cost structure and developed infrastructure. Thus, operating in a lucrative market makes the company well poised to benefit from the growth momentum in the diverse Texas market.
Further, the company’s strong deposit balances will help it to generate higher loans and meet other general business purposes. In addition, the company’s commitment to return value to its shareholders is backed by a solid capital position. Notably, the company has increased dividends annually for twenty-three consecutive years.
However, the company’s mounting expenses, stemming mostly from its focus on growing franchise, pose operational threats.
Further, nearly 73.4% of the company’s loan portfolio consists of commercial and industrial, construction and commercial real estate mortgage loans. These are relatively larger in volume and more exposed to default risks than residential real estate loans.
Other stocks worth considering in the Finance sector are mentioned below:
E*TRADE Financial Corporation : Over the last 60 days, the Zacks Consensus estimate moved up 2.2% to $1.83 for the current year.
Virtus Investment Partners, Inc. (VRTS - Free Report) : The Zacks Consensus estimate has improved 6.7% to $5.75, for the same time period.
Farmers Capital Bank Corporation : The Zacks Consensus estimate increased by 8.8% to $2.36, over the same time frame.
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>
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Why Cullen Frost (CFR) Stock Has Plenty of Upside Left
Cullen/Frost Bankers, Inc.’s (CFR - Free Report) shares have gained nearly 46.3% so far this year, outpacing the Zacks categorized Southwest Banks industry’s gain of 44.3%. The company’s consistent top-line growth, along with increasing loans and deposits balances, has contributed to the stock’s momentum, despite the expanding cost base.
The company has witnessed upward trend in its earnings estimate revision for the current year. Over the last 60 days, the Zacks Consensus Estimate for the stock has moved up 3.1% to $4.64. This positive earnings estimate revision suggests that analysts are becoming more optimistic on the stock’s performance in the near-term. Also, the stock sports a Zacks Rank #1 (Strong Buy), which underscores the stock’s outperformance.
Looking at the fundamentals, consistent revenue growth remains a key tailwind for the company. With the recent Fed rate hike, the company’s non-interest bearing deposits, a major low-cost funding source, will positively contribute to net interest income. Notably, the company offers a medium rate for funds as it has a relational deposit base, which provides an opportunity to compete on price.
The company is based in Texas, which is a well-diversified economy with low-cost structure and developed infrastructure. Thus, operating in a lucrative market makes the company well poised to benefit from the growth momentum in the diverse Texas market.
Further, the company’s strong deposit balances will help it to generate higher loans and meet other general business purposes. In addition, the company’s commitment to return value to its shareholders is backed by a solid capital position. Notably, the company has increased dividends annually for twenty-three consecutive years.
However, the company’s mounting expenses, stemming mostly from its focus on growing franchise, pose operational threats.
Further, nearly 73.4% of the company’s loan portfolio consists of commercial and industrial, construction and commercial real estate mortgage loans. These are relatively larger in volume and more exposed to default risks than residential real estate loans.
Other stocks worth considering in the Finance sector are mentioned below:
E*TRADE Financial Corporation : Over the last 60 days, the Zacks Consensus estimate moved up 2.2% to $1.83 for the current year.
Virtus Investment Partners, Inc. (VRTS - Free Report) : The Zacks Consensus estimate has improved 6.7% to $5.75, for the same time period.
Farmers Capital Bank Corporation : The Zacks Consensus estimate increased by 8.8% to $2.36, over the same time frame.
You can see the complete list of today’s Zacks #1 Rank stocks here.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>