Assessing Bank First (BFC) Valuation as Analyst Sentiment and Earnings Estimates Improve

Bank First (BFC) has drawn attention following a shift in analyst sentiment and an uptick in earnings estimates, which is fueling investor curiosity. The company’s solid performance compared to its sector peers is adding to this momentum.

See our latest analysis for Bank First.

Momentum has been building for Bank First, with this year’s share price return of 27.89% standing well ahead of its finance sector and industry benchmarks. The positive trend reflects both robust earnings growth and shifting investor sentiment, and it is supported by a three-year total shareholder return of 43.76%. This performance highlights the stock’s appeal for those seeking a combination of near-term movement and longer-term gains.

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But with shares up nearly 28% this year and trading below analyst price targets, investors are left wondering if Bank First remains undervalued or if the market has already priced in its future growth prospects.

Price-to-Earnings of 17.5x: Is it justified?

Bank First trades at a price-to-earnings (P/E) ratio of 17.5x, which is significantly above both its banking peers and industry standards. At the last close of $124.76, this multiple suggests the market expects earnings growth to continue at a robust pace.

The P/E ratio reflects how much investors are willing to pay for each dollar of current earnings. In the banking sector, this metric is a quick way to gauge whether a stock is expensive or offers value relative to its profit potential. A higher ratio can indicate strong growth prospects, but it may also signal that expectations are running well ahead of the industry norm.

Compared to the US Banks industry average (11.2x) and the average among peers (10.7x), Bank First appears notably expensive. Further, the current P/E is above the estimated Fair Price-to-Earnings Ratio of 13.9x, a level the market may gravitate toward if sentiment shifts.

Explore the SWS fair ratio for Bank First

Result: Price-to-Earnings of 17.5x (OVERVALUED)

However, slowing revenue growth or unexpected sector headwinds could quickly change the outlook and have an impact on Bank First’s lofty valuation.

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

Another Perspective: DCF Model Suggests Value

While the market may see Bank First as expensive compared to its industry based on earnings multiples, our DCF model paints a different picture. According to this method, the stock is trading about 21% below its estimated fair value. This could indicate significant upside for investors despite the high multiple.

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 Bank First 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 897 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 Bank First Narrative

If you see things differently or want to dive into the numbers yourself, it only takes a few minutes to shape your own view. Do it your way

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Bank First.

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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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