A Fresh Look at Republic Bancorp (RBCA.A) Valuation Following Recent Share Price Dip

Republic Bancorp (RBCA.A) stock has moved quietly over the past month, catching the attention of value-focused investors. Its share price has slipped about 3% in that time, prompting a closer look at the fundamentals.

See our latest analysis for Republic Bancorp.

After a steady stretch, Republic Bancorp’s share price recently slipped, bringing the one-month share price return to -2.7%. Despite this short-term dip, the longer view gives more reason for optimism. A solid 3-year total shareholder return of nearly 69% hints at underlying strength, even as recent trading suggests some momentum is fading.

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With Republic Bancorp’s long-term returns standing strong but recent momentum easing, is the current price a signal that the stock is being overlooked, or has the market already factored in its growth story?

Price-to-Earnings of 10.4x: Is it justified?

Republic Bancorp currently trades at a price-to-earnings (P/E) ratio of 10.4x, placing it just above its estimated fair P/E of 8.9x. With the last close at $67.83, this suggests the market is pricing in a meaningful premium compared to what a fair value model predicts.

The P/E ratio captures how much investors are willing to pay for a dollar of the company’s earnings. It is often used as a barometer for expected profit growth and quality. In banking, it reflects both profitability and the perceived stability of future earnings streams.

Compared to industry benchmarks, Republic Bancorp’s P/E of 10.4x sits below peers at 12.4x and the US Banks industry average at 11.2x. This hints that some conservatism is already baked into the share price. However, the fair value P/E of 8.9x suggests there is room for the market to adjust downward if future earnings do not meet expectations. This level could act as a new anchor if sentiment changes.

Explore the SWS fair ratio for Republic Bancorp

Result: Price-to-Earnings of 10.4x (OVERVALUED)

However, slower annual net income growth and a recent price dip could hint at underlying challenges if profitability trends do not improve soon.

Find out about the key risks to this Republic Bancorp narrative.

Another View: What Does the DCF Model Say?

While the market’s pricing and ratio comparisons paint Republic Bancorp as a bit expensive, our DCF model provides a different perspective. It estimates a fair value of $109.46 per share. At the current price of $67.83, the stock could be undervalued by nearly 38%. Is the market missing something the numbers reveal?

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 Republic 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 926 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 Republic Bancorp Narrative

If you’d rather dive into the numbers and shape your own outlook, building a personal narrative takes just a few minutes, so Do it your way

A great starting point for your Republic Bancorp 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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