Assessing Community Trust Bancorp (CTBI) Valuation as Dividend Growth and 2025 Earnings Outlook Drive Investor Interest

Community Trust Bancorp (CTBI) is starting to turn heads as investors take note of its above-average dividend yield, ongoing dividend growth, and an upbeat earnings outlook for 2025. With positive expectations building, the company is attracting new attention.

See our latest analysis for Community Trust Bancorp.

Community Trust Bancorp’s share price has cooled in recent weeks, slipping 6.3% over the past month even as the market digests optimistic forecasts for 2025. Still, investors looking longer-term have seen a solid 11.1% total shareholder return over the last year and an impressive 110.8% over five years. This reflects steady momentum supported by growing dividends and rising earnings.

If you’re on the lookout for other financial stocks drawing fresh interest, now’s a great time to broaden your search and discover fast growing stocks with high insider ownership

With shares now trading below their recent highs and analysts anticipating double-digit earnings growth through 2025, the key question is whether CTBI remains undervalued or if all that optimism is already reflected in the current price.

Price-to-Earnings of 10.6x: Is it justified?

At a price-to-earnings (P/E) ratio of 10.6x, Community Trust Bancorp looks attractively priced relative to both its peers and the broader industry. The company was trading at $53.32 per share at last close. This level suggests the market may be assigning less value to CTBI's current and future earnings power than to competing banks.

The P/E ratio is a widely used metric for banks, comparing the current share price to per-share earnings and offering investors a measure of how much they are paying for a dollar of company profit. For banks like CTBI, a lower P/E can indicate that the market has conservative expectations for growth or sees potential hidden value.

Looking closer, CTBI's P/E sits below the US Banks industry average of 11.3x, the peer average of 10.7x, and the estimated Fair Price-to-Earnings Ratio of 11.1x. This provides a compelling case that the market is undervaluing CTBI relative to both its immediate peers and a fair regression-based benchmark. The company’s consistent earnings growth and margin expansion over recent years further strengthen the argument that its current multiple could be due for a rerating.

Explore the SWS fair ratio for Community Trust Bancorp

Result: Price-to-Earnings of 10.6x (UNDERVALUED)

However, persistent share price declines and slower net income growth could challenge the bullish outlook and reduce enthusiasm for further gains.

Find out about the key risks to this Community Trust Bancorp narrative.

Another Perspective: SWS DCF Model Points to Much Higher Value

Taking a different approach, our DCF model suggests Community Trust Bancorp could be trading well below its intrinsic value. At $53.32, CTBI is priced about 51% beneath our estimate of fair value ($109.13). Could the market be overlooking this value, or is there a risk it stays discounted?

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 Community Trust Bancorp 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 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 Community Trust Bancorp Narrative

If you see the data differently or want to run your own numbers, you can shape your own perspective in just a few minutes, so Do it your way.

A good starting point is our analysis highlighting 5 key rewards investors are optimistic about regarding Community Trust Bancorp.

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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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