Bank Hapoalim (TASE:POLI) Valuation After Strong Earnings Growth and Major Buyback Announcement

Bank Hapoalim B.M. (TASE:POLI) just announced earnings showing marked growth in both net interest income and net income for the quarter. In addition, the bank unveiled a ILS 1,000 million share repurchase program.

See our latest analysis for Bank Hapoalim B.M.

After these upbeat earnings and buyback news, Bank Hapoalim B.M. has seen momentum build, with a 6.8% one-month share price return helping to boost its gains for the year. The stock’s 1-year total shareholder return now sits at a remarkable 69%, and its five-year total return is over 288%, a testament to sustained outperformance and renewed confidence as management continues to reward shareholders.

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With shares climbing on strong financials and a major buyback, the key question now is whether Bank Hapoalim B.M. remains undervalued or if the market has already accounted for the bank’s continued growth potential.

Most Popular Narrative: 3.2% Undervalued

With Bank Hapoalim B.M's fair value in the most popular narrative sitting just above its last close price, the market appears to be pricing in stable growth but not the full upside. The recent earnings release and strong track record fuel optimism, setting the stage for a deeper look at the factors driving this fair value.

Robust investment in digital banking capabilities and cost discipline have driven a best-in-class cost-income ratio (33.8%) and positive operating leverage. This suggests operational efficiency gains will further enhance net margins over time.

Read the complete narrative.

Curious what lies beneath this valuation? The narrative leans on ambitious projections for profitability, efficiency, and the future earnings multiple. Want to see which bold numbers support this scenario? Dive in to discover the quantitative leaps and pivotal forecasts that drive the fair value above today's market price.

Result: Fair Value of ₪71.55 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, continued strong performance is not guaranteed, since one-off profit boosts and potential weakness in the mortgage market could challenge future growth.

Find out about the key risks to this Bank Hapoalim B.M narrative.

Another View: Market Ratios Paint a Different Picture

Taking a look at Bank Hapoalim B.M using earnings multiples, its price-to-earnings ratio of 9.8x sits below the Israeli market average of 15.2x, but is slightly above both the Asian Banks industry average (9.3x) and what our model suggests is a fair ratio (9.4x). This narrow gap means the current valuation leaves little room for error or disappointment, as investors may face risks if earnings growth slows or expectations change.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Bank Hapoalim B.M Narrative

Prefer your own approach or see things differently? Take a few minutes to explore the data and craft your own view. Do it your way

A great starting point for your Bank Hapoalim B.M research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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