We’ve recently updated our valuation analysis.

First Merchants Valuation

Is FRME undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for FRME?

Other financial metrics that can be useful for relative valuation.

FRME key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenuen/a
Enterprise Value/EBITDAn/a
PEG Ratio0.5x

Price to Earnings Ratio vs Peers

How does FRME's PE Ratio compare to its peers?

FRME PE Ratio vs Peers
The above table shows the PE ratio for FRME vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average12x
AUB Atlantic Union Bankshares
11.1x12.2%US$2.4b
COLB Columbia Banking System
10.9x49.5%US$2.3b
PRK Park National
14.3x-1.7%US$2.1b
WSBC WesBanco
11.9x5.0%US$2.1b
FRME First Merchants
12.7x25.4%US$2.4b

Price-To-Earnings vs Peers: FRME is expensive based on its Price-To-Earnings Ratio (12.7x) compared to the peer average (12x).


Price to Earnings Ratio vs Industry

How does FRME's PE Ratio compare vs other companies in the US Banks Industry?

Price-To-Earnings vs Industry: FRME is expensive based on its Price-To-Earnings Ratio (12.7x) compared to the US Banks industry average (9.7x)


Price to Earnings Ratio vs Fair Ratio

What is FRME's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

FRME PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio12.7x
Fair PE Ratio17.8x

Price-To-Earnings vs Fair Ratio: FRME is good value based on its Price-To-Earnings Ratio (12.7x) compared to the estimated Fair Price-To-Earnings Ratio (17.8x).


Share Price vs Fair Value

What is the Fair Price of FRME when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: FRME ($40.07) is trading below our estimate of fair value ($112.96)

Significantly Below Fair Value: FRME is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.


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