FCNC.A: Net Interest Income And Credit Trends Will Shape Future Return Range

Analysts have modestly reduced their average price target on First Citizens BancShares to about $2,000 from roughly $2,150, citing resilient but range bound return expectations, a tempered net interest income outlook amid anticipated rate cuts, and incremental credit risk from specific borrower exposure, even as revenue growth and profitability assumptions edge higher.

Analyst Commentary

Sell side views on First Citizens BancShares reflect a mix of confidence in underlying fundamentals and caution around forward earnings power, leading to tighter, but still elevated, valuation expectations.

Bullish Takeaways

Bullish analysts highlight that Q3 performance and guidance suggest resilient, if range bound, returns, supporting the view that the stock can still justify a premium multiple versus most regional peers.
Improving momentum in global fund banking loan utilization and continued deposit inflows from deepening client relationships are seen as key growth levers that can sustain balance sheet expansion and fee opportunities over the medium term.
Clearer direction on net interest income and credit trends, especially during a period of market stress, reinforces confidence in management execution and reduces perceived earnings risk for long term holders.
JPMorgan, while trimming its price target, still expects solid loan and deposit growth and sees potential for net interest margin expansion relative to other small and mid cap banks, underpinning an Overweight stance tied to above peer earnings growth.

Bearish Takeaways

Bearish analysts are increasingly focused on net interest income headwinds from prospective rate cuts. They view the asset sensitive balance sheet as a constraint on upside to earnings and valuation in a lower rate environment.
The recent bankruptcy of a large auto parts supplier and the associated unsecured exposure are cited as evidence that idiosyncratic credit risks could incrementally pressure future earnings and justify more conservative multiple assumptions.
Reduction in forward EPS forecasts, particularly for FY25 and FY26, reflects concern that a flatter yield curve and multiple rate cuts could compress net interest margins by around 20 basis points, limiting near term operating leverage.
With price targets reduced across the Street, some bearish analysts argue that the risk reward is now more balanced and that shares may trade in a narrower range until there is greater visibility on the rate path and credit cycle.

What’s in the News

Completed a $600 million share repurchase of 329,937 shares, representing 2.52 percent of outstanding stock, under the buyback announced July 25, 2025 (company filing).
Reported a significant rise in net charge offs to $234 million, or 0.65 percent of average loans, for the third quarter of 2025, up from $119 million, or 0.33 percent, in the prior quarter (earnings release).
Tightened full year 2025 net interest income guidance to a range of $6.74 billion to $6.84 billion, reflecting a less favorable rate outlook and lower loan accretion versus 2024 (corporate guidance).
The board declared a quarterly common stock dividend of $2.10 per share, payable December 15, 2025, to shareholders of record as of November 28, 2025 (company announcement).
First Citizens Bank Equipment Finance entered a new vendor finance agreement with Dynapac North America to provide leasing and lending solutions for road construction equipment across Dynapac’s dealer network (client announcement).

Valuation Changes

Fair value has risen slightly, moving from approximately $2,166 to about $2,182 per share, reflecting a modestly higher intrinsic value estimate.
The discount rate has fallen slightly, from about 8.73 percent to roughly 8.56 percent, implying a marginally lower required return on equity.
Revenue growth assumptions have increased modestly, from around 2.63 percent to approximately 3.04 percent, signaling a slightly stronger top-line outlook.
Net profit margin expectations are essentially unchanged but edged higher, from about 23.25 percent to roughly 23.26 percent, indicating stable profitability assumptions.
Future P/E has declined slightly, from roughly 12.46x to about 12.33x, suggesting a minor compression in the forward valuation multiple.

Specialized industry verticals and digital strategies are key to driving growth in commercial segments and deposits, boosting revenue and net interest income.
Share repurchase programs and strategic financial decisions, reflecting management's confidence, aim to enhance EPS and stabilize or improve net margins.
Uncertainty and potential rate cuts threaten First Citizens BancShares' earnings, with challenges in credit exposure and specific portfolios risking elevated losses.

Catalysts

About First Citizens BancShares

Operates as the holding company for First-Citizens Bank & Trust Company that provides retail and commercial banking services to individuals, businesses, and professionals in the United States and internationally.What are the underlying business or industry changes driving this perspective?

First Citizens BancShares is focusing on growth in its Commercial Bank and SVB Commercial segments, particularly through specialized industry verticals such as tech, media, and telecom, which are expected to drive future loan growth and, consequently, revenue.
The company is leveraging its strong balance sheet and liquidity position to continue share repurchase programs, which are expected to improve earnings per share (EPS) significantly by reducing the number of shares outstanding.
First Citizens anticipates further growth in deposits through its Direct Bank and General Bank, using digital strategies and proactive marketing to attract and retain clients, potentially enhancing net interest income as deposit rates decline.
Strategic decisions such as terminating the loss share agreement with the FDIC and issuing new debt at attractive terms reflect management’s confidence in asset quality and financial flexibility, potentially stabilizing or improving net margins.
The company is investing in technology and risk management to support future growth and operational efficiency, likely aiming to optimize operating expenses and improve long-term net margins.

First Citizens BancShares Earnings and Revenue Growth

First Citizens BancShares Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming First Citizens BancShares's revenue will grow by 2.6% annually over the next 3 years.
Analysts assume that profit margins will shrink from 26.0% today to 22.6% in 3 years time.
Analysts expect earnings to reach $2.2 billion (and earnings per share of $216.09) by about September 2028, down from $2.3 billion today. However, there is some disagreement amongst the analysts with the more bullish ones expecting earnings as high as $2.5 billion.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 13.4x on those 2028 earnings, up from 10.8x today. This future PE is greater than the current PE for the US Banks industry at 11.9x.
Analysts expect the number of shares outstanding to decline by 7.0% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.45%, as per the Simply Wall St company report.

First Citizens BancShares Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The macroeconomic environment remains uncertain due to factors like tariff announcements and market volatility, making it difficult to predict future impacts on First Citizens BancShares' earnings and growth prospects. This could negatively affect revenue and net margins.
Lower net interest income guidance due to increased likelihood of rate cuts implies potential pressure on earnings as lower rate environments may squeeze net interest margins.
The decision to terminate the loss share agreement with the FDIC may increase exposure to potential credit losses from the acquired SVB portfolio, which could impact net earnings if the anticipated credit quality does not hold.
The company's asset-sensitive balance sheet could face challenges if interest rates are cut multiple times, potentially reducing net interest income, which is core to the bank's revenue model.
Credit concerns remain around specific portfolios like commercial real estate and investor-dependent sectors, which could see elevated losses and pressure earnings through higher charge-offs.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $2310.714 for First Citizens BancShares based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $2600.0, and the most bearish reporting a price target of just $2050.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $9.7 billion, earnings will come to $2.2 billion, and it would be trading on a PE ratio of 13.4x, assuming you use a discount rate of 8.5%.
Given the current share price of $1945.95, the analyst price target of $2310.71 is 15.8% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

FCNC.A: Net Interest Income Guidance Will Drive Returns Amid Rate Cut Uncertainty