FCNC.A: Forward Guidance And Credit Trends Will Drive Post-Earnings Confidence

First Citizens BancShares' analyst price target was revised slightly higher to $2,158.85 from $2,155, as analysts cite resilient Q3 performance and updated guidance that offset near-term earnings headwinds.

Analyst Commentary

Analysts have recently adjusted their perspectives on First Citizens BancShares, balancing both positive and cautious views following the company’s latest earnings and guidance updates.

Bullish Takeaways

Forward-looking guidance on net interest income and credit trends suggests management is proactively addressing market volatility. This instills investor confidence in the bank’s operational execution.
Solid loan and deposit growth momentum is highlighted. Deepening client relationships are contributing to increased fund banking loan utilization and stronger deposit inflows.
Despite guidance revisions, analysts expect overall performance to remain resilient. This supports stable to improving valuations even amid sector headwinds.
Some believe the bank has cleared a key post-earnings hurdle by providing transparent direction on interest rate sensitivity. This helps mitigate uncertainty for investors focused on long-term growth prospects.

Bearish Takeaways

Multiple analysts have reduced their price targets, citing headwinds including projected net interest margin compression due to anticipated rate cuts next year.
Guidance for 2025 and 2026 earnings per share has been revised downward, with specific mention of exposures such as the recent auto supplier bankruptcy, which could weigh on near-term profitability.
Some believe returns may remain range-bound in the near future. This is due to lingering net interest income pressures and macroeconomic uncertainty.
Despite improvements in certain operational metrics, analysts remain cautious about the impact of rate dynamics on the bank’s overall asset-liability profile.

What's in the News

First Citizens Bank Equipment Finance entered a vendor finance agreement with Dynapac North America LLC to provide leasing and lending solutions for road construction equipment. This initiative aims to offer Dynapac’s dealer network flexible financing options for road-paving projects (Client Announcements).
The company reported net charge-offs of $234 million (0.65% of average loans) for the third quarter ended September 30, 2025. This marks a notable increase from $119 million (0.33% of average loans) in the previous quarter (Impairments/Write Offs).
First Citizens BancShares completed share repurchases totaling 457,350 shares, representing approximately 3.49% of shares outstanding, for a combined cost of $900 million during the quarter. The buybacks were conducted under repurchase programs announced in July 2024 and July 2025 (Buyback Tranche Update).
The company revised its full-year 2025 earnings guidance, tightening net interest income expectations to a range of $6.74 billion to $6.84 billion. It also indicated a projected $200 million annual decrease in loan accretion versus 2024 levels (Corporate Guidance Raised).
The Board of Directors declared a quarterly common stock dividend of $2.10 per share, to be paid on December 15, 2025, to shareholders of record as of November 28, 2025 (Dividend Increases).

Valuation Changes

Consensus Analyst Price Target increased slightly from $2,155 to $2,158.85, reflecting a modest upward revision in fair value estimates.
Discount Rate edged higher from 8.70% to 8.71%, suggesting a minor recalibration in risk assumptions applied to future cash flows.
Revenue Growth projections remain essentially unchanged, holding steady at approximately 2.62%.
Net Profit Margin forecast improved marginally to 23.29% from 23.16%, indicating slightly stronger profitability expectations.
Future P/E ratio decreased modestly from 12.43x to 12.38x, reflecting a minor adjustment in valuation multiples based on revised earnings outlook.

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.

How well do narratives help inform your perspective?

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