TF Bank (OM:TFBANK) Valuation Spotlight Following New SEK 150m Tier 2 Bond Plans and Capital Structure Shift

TF Bank (OM:TFBANK) is setting up for a SEK 150 million Tier 2 bond issue, aiming to refinance its outstanding Tier 2 bonds and support general operations. This move is expected to reshape its funding structure and capital profile.

See our latest analysis for TF Bank.

TF Bank’s latest moves come after a strong run, with recent management changes and bold steps to refresh its capital structure grabbing headlines. Despite a pullback over the past month, the 90-day share price return of 16.5% and an impressive 61.9% total shareholder return for the past year suggest momentum is still with the stock, which hints at optimism about the bank’s growth and long-term resilience.

If news like this has you rethinking what’s possible in the Nordic market, it’s a great time to broaden your investing horizons and discover fast growing stocks with high insider ownership

But is the recent correction a chance for investors to buy into TF Bank at a discount, or does the current price already reflect the company’s robust momentum and future growth prospects?

Price-to-Earnings of 16.3x: Is it justified?

TF Bank’s shares currently trade at a price-to-earnings (P/E) ratio of 16.3x, which places it well above the typical sector benchmark. With the last close at SEK175.66, the stock reflects investor confidence but stands at a premium both to peers and to its estimated “fair” multiple.

The P/E ratio compares the company’s share price to its per-share earnings, serving as a snapshot of how the market values TF Bank’s profitability. For banks, it helps investors weigh current earnings power against future growth and operational risk.

Right now, TF Bank’s P/E ratio is below the Swedish market average of 22.1x. However, it is significantly higher than both the European Banks industry average (10.1x) and the peer group average (12x). It also exceeds the company’s estimated fair P/E of 13.2x. These comparisons suggest investors are pricing in ambitious growth despite sector headwinds, and further movement could depend on whether recent momentum turns into sustainable outperformance.

Explore the SWS fair ratio for TF Bank

Result: Price-to-Earnings of 16.3x (OVERVALUED)

However, slower net income growth or a reversal in recent share price momentum could challenge the optimistic outlook for TF Bank’s continued outperformance.

Find out about the key risks to this TF Bank narrative.

Another View: SWS DCF Model Signals Overvaluation

While the P/E ratio suggests TF Bank is trading at a premium, our SWS DCF model presents an even starker picture, implying that shares may be overvalued by a wide margin. The fair value is SEK120.81 compared to the current price of SEK175.66. If the DCF model is correct, there may be less upside than current multiples imply. Should investors trust the market’s optimism, or take the more cautious DCF result to heart?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out TF Bank for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 868 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own TF Bank Narrative

If you prefer to dig into the data and draw your own conclusions, you can craft a personalized perspective in just a few minutes, or simply Do it your way.

A great starting point for your TF Bank research is our analysis highlighting 3 key rewards and 3 important warning signs 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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