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Popular Rallies 23.4% in Six Months: Buy, Hold, or Sell the Stock?
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Key Takeaways
Popular's shares gained 23.4% in the past six months, outperforming the industry and key peers.
BPOP expects 2026 NII growth of 8-9%, supported by lower funding costs and higher loan balances.
Popular raised its dividend 20% to 90 cents and plans $300-$400 million in 2026 buybacks.
Popular, Inc. (BPOP - Free Report) shares have gained 23.4% over the past six months compared with the industry’s growth of 12.9%.
If we compare BPOP’s price performance with two of its close peers, Flagstar Bank (FLG - Free Report) and Regions Financial (RF - Free Report) , it appears that the stock has outperformed both. Over the past six months, FLG shares have lost 0.3%, while RF shares have gained 12.2%.
Price Performance
Image Source: Zacks Investment Research
Despite outperforming the industry and peers, let us assess whether BPOP still has upside potential based on its fundamentals and growth prospects.
Factors Aiding Popular’s Stock
Loan and Deposit Growth: The company remains focused on strengthening its core operations through an organic growth strategy. Over 2020-2025, its net loans and total deposits grew at compound annual growth rates (CAGRs) of 6.2% and 3.1%, respectively. The upward trend continued for both loans and deposits in the first half of 2026. At the Barclays 24th Annual Global Financial Services Conference, management reiterated its expectation for 2026 loan growth at the low end of the 3-4% range, reflecting headwinds in the U.S. construction portfolio and softer auto lending in Puerto Rico. Nevertheless, a renewed focus on retaining and deepening deposit relationships is expected to support organic growth in the upcoming period.
Digital Transformation to Drive Efficiency: The company is focused on strengthening its technology infrastructure and adopting agile practices to enhance the digital client experience, streamline employee processes and improve efficiency and profitability. As part of these efforts, the company acquired key customer channels from Evertec in 2022 to accelerate its digital transformation. In 2023, Popular invested $300 million in technology infrastructure to enhance the reliability, security and innovation of its banking platforms and improve the customer experience.
The company has continued to expand its digital capabilities through initiatives such as an integrated marketplace within its Mi Banco app and new corporate credit cards, helping deepen customer relationships and support fee income growth. In the first half of 2026, non-interest income increased 8% year over year, while return on tangible common equity (ROTCE) rose to 17.02% from 12.32% a year earlier. Management also raised its annual ROTCE objective to 14%-17% and quarterly non-interest income guidance to $165-$170 million.
Going forward, continued investments in technology and digital capabilities are expected to enhance customer engagement, support fee income growth and improve operating efficiency, while helping Popular sustain stronger returns and profitability.
NII Growth: Popular has maintained solid momentum in spread income, with net interest income (NII) expanding at a 6.5% CAGR during 2020-2025 and net interest margin (NIM) improving to 3.49% in 2025 from 2.88% in 2021. This momentum continued in the first half of 2026, as NII increased 10.2% year over year to $1.36 billion and average NIM expanded 22 basis points to 3.67%. Lower funding costs, higher loan balances and increased investment in U.S. Treasury securities supported the improvement. Against this backdrop, management raised its 2026 NII growth outlook to 8-9% and expects NIM to remain generally stable through 2026. Although the Federal Reserve raised interest rates by 25 basis points to 3.75-4.00% in September 2026, continued earning-asset repricing and higher investment yields are expected to support NII in the upcoming period.
Solid Liquidity Profile:The company enjoys a robust liquidity position. As of June 30, 2026, the company’s liquidity totaled $4.6 billion, while its total debt, comprising both short-term borrowings and long-term obligations, stood at nearly $1.5 billion.
Given its strong liquidity profile, Popular has consistently rewarded its shareholders through dividends and share buybacks. In August 2026, the company raised its quarterly dividend by 20% to 90 cents per share. Currently, the dividend yield of the company stands at 2.2%. Further, the dividend yield of its peers, Regions Financial and Flagstar Bank, is 4.2% and 0.3%, respectively.
Dividend Yield
Image Source: Zacks Investment Research
Additionally, BPOP has a share repurchase plan. In July 2026, the company announced a new share repurchase authorization of up to $1 billion. Given the company’s steady capital generation and continued focus on shareholder returns, such capital distribution activities remain an important part of its capital allocation strategy.
What’s Hurting Popular’s Growth
Elevated Expense Base: Popular faces continued expense pressure, with costs rising at a 5.8% CAGR over 2020-2025. Although expenses declined 1.3% year over year in the first half of 2026, technology and software costs rose 7%, while personnel expenses also increased. Management expects expenses to grow 2-3% in 2026, due to salary adjustments, technology investments and transformation initiatives, with greater pressure in the second half. Slower revenue growth or efficiency gains could limit the benefits of these investments and weigh on profitability.
Loan Concentration Risk: Along with expense pressure, Popular’s significant exposure to commercial lending remains a key risk to its financial performance. As of June 30, 2026, commercial loans totaled $20.05 billion, representing 50.4% of total loans held in the portfolio. A slowdown in economic or business activity could weaken the credit quality of commercial borrowers and result in higher credit costs. Thus, the sizeable concentration in commercial loans could increase earnings pressure if economic conditions deteriorate or credit losses rise.
BPOP's Earnings Estimates and Valuation Analysis
The Zacks Consensus Estimate for BPOP’s 2026 and 2027 earnings indicates a 29.3% and 8.9% rise, respectively. Over the past 60 days, the earnings estimates for 2026 and 2027 have been revised upward.
Estimates Revision Trend
Image Source: Zacks Investment Research
In terms of valuation, BPOP stock appears inexpensive relative to the industry. The company is currently trading at a 12-month trailing price-to-earnings (P/E) of 9.7X, which is lower than the industry’s 10.7X.
Price-to-Earnings F12 M
Image Source: Zacks Investment Research
Meanwhile, Flagstar Bank holds a forward 12-month P/E ratio of 12.1X, while Regions Financial’s P/E ratio stands at 10.2X. Hence, BPOP is also trading at a discount to FLG and RF.
Final Thoughts on BPOP Stock
Popular continues to face pressure from a rising expense base and significant commercial loan exposure, which could weigh on profitability if costs remain elevated or credit conditions weaken. Nevertheless, these risks appear manageable as steady loan and deposit growth, solid NII growth, improving margins and continued technology investments are expected to support operating performance. Its strong liquidity position also supports continued capital distribution through dividends and share buybacks.
Moreover, positive earnings estimate revisions point to improving expectations for BPOP’s earnings growth potential, while its attractive valuation relative to the industry and key peers provides additional support.
Thus, considering its improving earnings outlook, attractive valuation and solid operating fundamentals, Popular presents a favorable investment case.
View the Zacks #1 Rank List
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Popular Rallies 23.4% in Six Months: Buy, Hold, or Sell the Stock?
Key Takeaways
Popular, Inc. (BPOP - Free Report) shares have gained 23.4% over the past six months compared with the industry’s growth of 12.9%.
If we compare BPOP’s price performance with two of its close peers, Flagstar Bank (FLG - Free Report) and Regions Financial (RF - Free Report) , it appears that the stock has outperformed both. Over the past six months, FLG shares have lost 0.3%, while RF shares have gained 12.2%.
Price Performance
Image Source: Zacks Investment Research
Despite outperforming the industry and peers, let us assess whether BPOP still has upside potential based on its fundamentals and growth prospects.
Factors Aiding Popular’s Stock
Loan and Deposit Growth: The company remains focused on strengthening its core operations through an organic growth strategy. Over 2020-2025, its net loans and total deposits grew at compound annual growth rates (CAGRs) of 6.2% and 3.1%, respectively. The upward trend continued for both loans and deposits in the first half of 2026. At the Barclays 24th Annual Global Financial Services Conference, management reiterated its expectation for 2026 loan growth at the low end of the 3-4% range, reflecting headwinds in the U.S. construction portfolio and softer auto lending in Puerto Rico. Nevertheless, a renewed focus on retaining and deepening deposit relationships is expected to support organic growth in the upcoming period.
Digital Transformation to Drive Efficiency: The company is focused on strengthening its technology infrastructure and adopting agile practices to enhance the digital client experience, streamline employee processes and improve efficiency and profitability. As part of these efforts, the company acquired key customer channels from Evertec in 2022 to accelerate its digital transformation. In 2023, Popular invested $300 million in technology infrastructure to enhance the reliability, security and innovation of its banking platforms and improve the customer experience.
The company has continued to expand its digital capabilities through initiatives such as an integrated marketplace within its Mi Banco app and new corporate credit cards, helping deepen customer relationships and support fee income growth. In the first half of 2026, non-interest income increased 8% year over year, while return on tangible common equity (ROTCE) rose to 17.02% from 12.32% a year earlier. Management also raised its annual ROTCE objective to 14%-17% and quarterly non-interest income guidance to $165-$170 million.
Going forward, continued investments in technology and digital capabilities are expected to enhance customer engagement, support fee income growth and improve operating efficiency, while helping Popular sustain stronger returns and profitability.
NII Growth: Popular has maintained solid momentum in spread income, with net interest income (NII) expanding at a 6.5% CAGR during 2020-2025 and net interest margin (NIM) improving to 3.49% in 2025 from 2.88% in 2021. This momentum continued in the first half of 2026, as NII increased 10.2% year over year to $1.36 billion and average NIM expanded 22 basis points to 3.67%. Lower funding costs, higher loan balances and increased investment in U.S. Treasury securities supported the improvement. Against this backdrop, management raised its 2026 NII growth outlook to 8-9% and expects NIM to remain generally stable through 2026. Although the Federal Reserve raised interest rates by 25 basis points to 3.75-4.00% in September 2026, continued earning-asset repricing and higher investment yields are expected to support NII in the upcoming period.
Solid Liquidity Profile:The company enjoys a robust liquidity position. As of June 30, 2026, the company’s liquidity totaled $4.6 billion, while its total debt, comprising both short-term borrowings and long-term obligations, stood at nearly $1.5 billion.
Given its strong liquidity profile, Popular has consistently rewarded its shareholders through dividends and share buybacks. In August 2026, the company raised its quarterly dividend by 20% to 90 cents per share. Currently, the dividend yield of the company stands at 2.2%. Further, the dividend yield of its peers, Regions Financial and Flagstar Bank, is 4.2% and 0.3%, respectively.
Dividend Yield
Image Source: Zacks Investment Research
Additionally, BPOP has a share repurchase plan. In July 2026, the company announced a new share repurchase authorization of up to $1 billion. Given the company’s steady capital generation and continued focus on shareholder returns, such capital distribution activities remain an important part of its capital allocation strategy.
What’s Hurting Popular’s Growth
Elevated Expense Base: Popular faces continued expense pressure, with costs rising at a 5.8% CAGR over 2020-2025. Although expenses declined 1.3% year over year in the first half of 2026, technology and software costs rose 7%, while personnel expenses also increased. Management expects expenses to grow 2-3% in 2026, due to salary adjustments, technology investments and transformation initiatives, with greater pressure in the second half. Slower revenue growth or efficiency gains could limit the benefits of these investments and weigh on profitability.
Loan Concentration Risk: Along with expense pressure, Popular’s significant exposure to commercial lending remains a key risk to its financial performance. As of June 30, 2026, commercial loans totaled $20.05 billion, representing 50.4% of total loans held in the portfolio. A slowdown in economic or business activity could weaken the credit quality of commercial borrowers and result in higher credit costs. Thus, the sizeable concentration in commercial loans could increase earnings pressure if economic conditions deteriorate or credit losses rise.
BPOP's Earnings Estimates and Valuation Analysis
The Zacks Consensus Estimate for BPOP’s 2026 and 2027 earnings indicates a 29.3% and 8.9% rise, respectively. Over the past 60 days, the earnings estimates for 2026 and 2027 have been revised upward.
Estimates Revision Trend
Image Source: Zacks Investment Research
In terms of valuation, BPOP stock appears inexpensive relative to the industry. The company is currently trading at a 12-month trailing price-to-earnings (P/E) of 9.7X, which is lower than the industry’s 10.7X.
Price-to-Earnings F12 M
Image Source: Zacks Investment Research
Meanwhile, Flagstar Bank holds a forward 12-month P/E ratio of 12.1X, while Regions Financial’s P/E ratio stands at 10.2X. Hence, BPOP is also trading at a discount to FLG and RF.
Final Thoughts on BPOP Stock
Popular continues to face pressure from a rising expense base and significant commercial loan exposure, which could weigh on profitability if costs remain elevated or credit conditions weaken. Nevertheless, these risks appear manageable as steady loan and deposit growth, solid NII growth, improving margins and continued technology investments are expected to support operating performance. Its strong liquidity position also supports continued capital distribution through dividends and share buybacks.
Moreover, positive earnings estimate revisions point to improving expectations for BPOP’s earnings growth potential, while its attractive valuation relative to the industry and key peers provides additional support.
Thus, considering its improving earnings outlook, attractive valuation and solid operating fundamentals, Popular presents a favorable investment case.
BPOP currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.