Last Update 24 Dec 25

FBP: Future Share Repurchases Will Support Returns Despite Margin Headwinds

Analysts have trimmed their average price target on First BanCorp by about $1 to $24, reflecting more cautious expectations for net interest margin expansion and limited upside, with the bank already operating at a high level.

Analyst Commentary

Recent research updates present a more balanced view on First BanCorp, with adjustments to price targets and earnings forecasts reflecting both confidence in execution and recognition of a moderating growth outlook.

Bullish Takeaways

Bullish analysts continue to see upside to the current share price, with a $24 price target implying the stock can still appreciate from present levels despite the trimmed outlook.
The decision to maintain positive ratings indicates confidence in the bank's ability to deliver solid earnings and manage its balance sheet effectively within a more challenging rate environment.
Updated 2026 EPS estimates, while slightly lower, still point to a healthy profit trajectory, supporting the view that First BanCorp can sustain above average returns on equity.
Management's guidance on net interest margin is viewed as credible, and bullish analysts see disciplined execution and asset quality as key supports for valuation.

Bearish Takeaways

Bearish analysts argue that a more constrained net interest margin outlook limits earnings growth, reducing the scope for multiple expansion from current valuation levels.
The reduction in EPS forecasts and price targets signals concern that incremental returns on capital may be harder to achieve as the bank matures.
With First BanCorp already operating at what is viewed as a very high level, some see limited operational levers left to materially boost profitability or drive upside surprises.
This combination of strong current performance but slower prospective growth leads more cautious observers to favor a neutral stance. They expect the stock to track fundamentals rather than re rate meaningfully higher.

What's in the News

The Board of Directors has authorized a new share repurchase plan, indicating an ongoing commitment to returning capital to shareholders (Key Developments).
First BanCorp has announced a share repurchase program of up to $200 million, with shares to be held as treasury stock and the program running through the fourth quarter of 2026 (Key Developments).
From July 1, 2025, to November 4, 2025, the company repurchased 3,580,511 shares for $73.7 million, completing a total of 6,358,809 shares bought back for $123.78 million under the July 22, 2024, authorization (Key Developments).

Valuation Changes

Fair Value: Unchanged at approximately $24.17 per share, indicating no shift in the intrinsic value estimate.
Discount Rate: Fallen very slightly from 6.96 percent to 6.96 percent, reflecting a negligible adjustment to the risk profile.
Revenue Growth: Essentially unchanged at about 9.05 percent, with only an immaterial rounding difference in long term growth assumptions.
Net Profit Margin: Flat at roughly 27.98 percent, suggesting no meaningful revision to long term profitability expectations.
Future P/E: Stable at approximately 12.64x, indicating no notable change in the valuation multiple applied to projected earnings.

Robust loan growth, digital investment, and a healthy labor market are boosting earnings potential and supporting stable asset quality.
Reinvestment strategies and disciplined capital return policies enhance profitability, protect downside risk, and improve shareholder value.
Heavy reliance on limited markets, rising regulatory costs, and lagging digital adoption could undermine growth, profitability, and stability amid competition and demographic challenges.

Catalysts

About First BanCorp

Operates as the bank holding company for FirstBank Puerto Rico that provides financial products and services to consumers and commercial customers.What are the underlying business or industry changes driving this perspective?

Puerto Rico's ongoing economic recovery, coupled with strong commercial loan demand and continued federal infrastructure investment, is supporting robust loan growth at First BanCorp; this rising lending activity sets the stage for higher future revenues and earnings.
The bank's aggressive and sustained investment in digital platforms-evidenced by multi-year growth in active digital users and streamlined operations-positions it to capture cost efficiencies and improve net margins as customers shift toward digital channels.
Favorable labor market conditions and improving consumer health are reducing credit losses, as seen in lower net charge-offs and stable/non-improving asset quality metrics, which could support more stable and higher earnings in the future.
The ability to reinvest large volumes of maturing lower-yield securities into higher-yielding assets over the next 12 months is expected to drive incremental improvements to net interest margin, directly benefiting both revenue and net income.
A disciplined capital return policy including buybacks and dividends, combined with a strengthening tangible capital base, provides downside protection and has the potential to enhance EPS and tangible book value per share.

First BanCorp Earnings and Revenue Growth

First BanCorp Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming First BanCorp's revenue will grow by 10.2% annually over the next 3 years.
Analysts assume that profit margins will shrink from 34.4% today to 29.3% in 3 years time.
Analysts expect earnings to reach $349.9 million (and earnings per share of $2.37) by about September 2028, up from $306.7 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 13.0x on those 2028 earnings, up from 11.3x 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 2.1% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 6.78%, as per the Simply Wall St company report.

First BanCorp Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Persistent demographic stagnation or decline in Puerto Rico and the Caribbean could shrink First BanCorp's core customer base, potentially slowing loan and deposit growth and leading to lower long-term revenue.
Limited geographic diversification leaves First BanCorp disproportionately exposed to localized economic shocks, natural disasters, or changes in government funding priorities in Puerto Rico and Florida, introducing the risk of volatile earnings and revenue disruption.
Heightened competition for commercial deposits, particularly from high-yield seeking customers in a "higher for longer" interest rate environment, could increase funding costs or pressure net interest margins, making it harder to sustain current profitability levels.
Ongoing need for significant investment in technology and digital transformation, combined with slower adoption of digital banking services relative to larger mainland competitors, may strain expense management and limit the company's ability to generate new sources of fee-based revenue, negatively impacting long-term margins and earnings growth.
Intensifying regulatory requirements and compliance costs-especially related to anti-money laundering and cybersecurity-could erode operational efficiency and profitability, making it more challenging for First BanCorp to maintain its current efficiency ratio and earnings trajectory.

Valuation

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

The analysts have a consensus price target of $25.0 for First BanCorp based on their expectations of its future earnings growth, profit margins and other risk factors.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $1.2 billion, earnings will come to $349.9 million, and it would be trading on a PE ratio of 13.0x, assuming you use a discount rate of 6.8%.
Given the current share price of $21.75, the analyst price target of $25.0 is 13.0% 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.

Operational Excellence And Repurchases Will Support Resilience Amid Narrowing Margins