We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why You Should Hold On to Cullen/Frost (CFR) Stock Now
Read MoreHide Full Article
On May 28, we issued an updated research report on Cullen/Frost Bankers, Inc. (CFR - Free Report) . The company has been witnessing steady revenue growth for the past several years and has a robust balance sheet with a strong liquidity position. However, rising expenses and a significant exposure to the real estate sector are concerns.
Cullen/Frost’s organic growth looks impressive, as reflected by its revenue growth story. Revenues witnessed a CAGR of 6.4% over the last five years (2015-2019), with the trend continuing in the first three months of 2020. Moreover, the low-cost funding source — non-interest bearing deposits — representing more than 40% of total deposits, are anticipated to aid the net interest income and margin.
The bank has a decent debt position. As of Mar 31, 2020, the company has debt worth $1.41 billion, which has remained almost stable for the past few quarters. Also, its debt-capital ratio is currently 0.06 which compares favorably with the industry’s average of 0.35. Further, as of the same date, the company displayed strong cash and cash equivalents of $4.2 billion.
However, the company’s mounting non-interest expenses over the years is a concern. The same witnessed a CAGR of 3.3% over the last five years (2015-2019), primarily due to rise in almost all cost components. Costs continued to flare up in first-quarter 2020.
Also, Cullen/Frost’s significant exposure to the real estate sector is a concern. As of Mar 31, 2020, the company’s exposure to these loan portfolios was about 50% of the total loans. Though the housing sector has been showing signs of improvement, any further deterioration in real estate prices will act as a headwind.
Further, the Zacks Consensus Estimate for earnings has been revised 24.2% and 17% downward for 2020 and 2021, respectively, over the past two months.
Shares of this Zacks Rank #3 (Hold) company have lost 22.3%, so far this year, compared with the 26.2% decline recorded by the industry.
OP Bancorp’s (OPBK - Free Report) Zacks Consensus Estimate for 2020 earnings moved 1.4% upward to 71 cents over the past two months. The stock currently holds a Zacks Rank of 2.
Prosperity Bancshares, Inc.’s (PB - Free Report) Zacks Consensus Estimate for earnings moved 5.1% upward to $4.98 in two months’ time for the ongoing year. The stock currently carries a Zacks Rank of 2.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
This young company’s gigantic growth was hidden by low-volume trading, then cut short by the coronavirus. But its digital products stand out in a region where the internet economy has tripled since 2015 and looks to triple again by 2025. Its stock price is already starting to resume its upward arc. The sky’s the limit! And the earlier you get in, the greater your potential gain.
Image: Bigstock
Here's Why You Should Hold On to Cullen/Frost (CFR) Stock Now
On May 28, we issued an updated research report on Cullen/Frost Bankers, Inc. (CFR - Free Report) . The company has been witnessing steady revenue growth for the past several years and has a robust balance sheet with a strong liquidity position. However, rising expenses and a significant exposure to the real estate sector are concerns.
Cullen/Frost’s organic growth looks impressive, as reflected by its revenue growth story. Revenues witnessed a CAGR of 6.4% over the last five years (2015-2019), with the trend continuing in the first three months of 2020. Moreover, the low-cost funding source — non-interest bearing deposits — representing more than 40% of total deposits, are anticipated to aid the net interest income and margin.
The bank has a decent debt position. As of Mar 31, 2020, the company has debt worth $1.41 billion, which has remained almost stable for the past few quarters. Also, its debt-capital ratio is currently 0.06 which compares favorably with the industry’s average of 0.35. Further, as of the same date, the company displayed strong cash and cash equivalents of $4.2 billion.
However, the company’s mounting non-interest expenses over the years is a concern. The same witnessed a CAGR of 3.3% over the last five years (2015-2019), primarily due to rise in almost all cost components. Costs continued to flare up in first-quarter 2020.
Also, Cullen/Frost’s significant exposure to the real estate sector is a concern. As of Mar 31, 2020, the company’s exposure to these loan portfolios was about 50% of the total loans. Though the housing sector has been showing signs of improvement, any further deterioration in real estate prices will act as a headwind.
Further, the Zacks Consensus Estimate for earnings has been revised 24.2% and 17% downward for 2020 and 2021, respectively, over the past two months.
Shares of this Zacks Rank #3 (Hold) company have lost 22.3%, so far this year, compared with the 26.2% decline recorded by the industry.
Stocks to Consider
First Foundation Inc.’s (FFWM - Free Report) Zacks Consensus Estimate for the current-year earnings moved 8.7% north to $1.50 over the past two months. The stock currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
OP Bancorp’s (OPBK - Free Report) Zacks Consensus Estimate for 2020 earnings moved 1.4% upward to 71 cents over the past two months. The stock currently holds a Zacks Rank of 2.
Prosperity Bancshares, Inc.’s (PB - Free Report) Zacks Consensus Estimate for earnings moved 5.1% upward to $4.98 in two months’ time for the ongoing year. The stock currently carries a Zacks Rank of 2.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
This young company’s gigantic growth was hidden by low-volume trading, then cut short by the coronavirus. But its digital products stand out in a region where the internet economy has tripled since 2015 and looks to triple again by 2025.
Its stock price is already starting to resume its upward arc. The sky’s the limit! And the earlier you get in, the greater your potential gain.
Click Here, See It Free >>