FBP: Share Repurchases Will Support Future Returns Despite Margin Constraints

Analysts have trimmed their price target on First BanCorp to $24.00 from a prior range of $25.00 to $26.00, citing a more constrained outlook for net interest margin expansion and limited upside given the bank's already strong operating performance.

Analyst Commentary

Recent Street research reflects a more balanced stance on First BanCorp, with revised price targets converging around $24.00 and modest adjustments to forward earnings expectations.

Bullish analysts highlight that the bank continues to execute well operationally and see room for continued solid earnings, even with slower net interest margin expansion. Bearish analysts, however, emphasize that the shares already reflect much of this strength, limiting upside from current levels.

Bullish Takeaways

• Bullish analysts maintain favorable ratings, viewing the $24.00 price target as still leaving upside relative to current valuation based on earnings power.
• They see First BanCorp's already strong operating performance as a sign of disciplined execution that can support resilient returns, even if growth moderates.
• The modest reduction in 2026 EPS expectations is framed as a recalibration, not a structural concern, with analysts still expecting solid profit growth over the medium term.
• Stable asset quality and consistent profitability underpin the view that the stock can justify a premium valuation to many regional peers.

Bearish Takeaways

• Bearish analysts argue that a more constrained net interest margin outlook limits earnings acceleration, which may cap the potential for multiple expansion.
• They caution that with First BanCorp already operating at a very high level, there are fewer levers left to drive upside surprises on revenue or efficiency.
• The reset in price targets from the mid $20s to $24.00 is interpreted as a view that the risk or reward profile has normalized, with less room for outperformance versus the sector.
• Concerns that incremental growth will rely more on volume than margin lead to questions about how much further valuation can expand without a stronger macro or rate backdrop.

What's in the News

• The Board of Directors authorizes a new share repurchase plan on October 22, 2025, signaling continued confidence in capital strength and valuation (Key Developments).
• First BanCorp announces a share repurchase program of up to $200 million, with repurchased shares to be held as treasury stock and the program set to run through the fourth quarter of 2026 (Key Developments).
• From July 1, 2025 to November 4, 2025, the company repurchases 3,580,511 shares, or 2.23% of shares outstanding, for $73.7 million, completing a total buyback of 6,358,809 shares, or 3.94%, for $123.78 million under the program announced July 22, 2024 (Key Developments).

Valuation Changes

• Fair Value Estimate is effectively unchanged at approximately $24.17 per share, indicating no material shift in intrinsic valuation.
• Discount Rate edged down slightly from 6.96% to 6.956%, reflecting a marginally lower required return assumption.
• Revenue Growth remains effectively flat at about 9.05%, suggesting no change in long term topline growth expectations.
• Net Profit Margin is virtually unchanged at roughly 27.98%, indicating stable profitability assumptions.
• Future P/E holds steady at about 12.64x, implying no meaningful adjustment to the valuation multiple applied to forward earnings.