Does Trustmark’s Recent Expansion Support Its Current Value After a 3.9% Weekly Drop?

• Wondering whether Trustmark is a smart pick at its current price? You are not alone, as many investors are discussing whether the stock truly offers value right now.
• Despite climbing 7.5% year-to-date and gaining 11.6% over the past 12 months, Trustmark's stock has dipped by 3.9% in the last week and 6.1% this month. These recent moves have prompted fresh debate over its growth prospects versus underlying risks.
• Recent headlines have focused on Trustmark’s new strategic initiatives and expansion into regional markets. This has injected optimism into new growth opportunities. At the same time, ongoing shifts in the broader banking sector are keeping investors attentive to both potential upsides and sector-wide challenges.
• Trustmark currently scores a 2 out of 6 on key undervaluation checks, which suggests there is still plenty to consider. Next, we will explore how different valuation methods compare, and later in the article, present a more insightful way to think about what the stock is really worth.

Trustmark scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Trustmark Excess Returns Analysis

The Excess Returns valuation model looks at how effectively Trustmark is generating returns above its cost of equity. This approach judges the company not just on earnings, but on how much value it adds for shareholders through efficient use of its capital.

For Trustmark, the numbers offer a clear snapshot:

• Book Value: $35.16 per share
• Stable EPS: $2.06 per share (based on the median return on equity over the last five years)
• Cost of Equity: $2.61 per share
• Excess Return: $-0.55 per share
• Average Return on Equity: 5.37%
• Stable Book Value: $38.35 per share (projected by six analysts)

Because Trustmark’s return on equity has not surpassed its cost of equity, the model calculates a negative excess return. This means the company is not delivering the kind of shareholder value that would warrant a valuation premium.

As a result, the estimated intrinsic value per share is about 58.1% below the current price. This suggests Trustmark is significantly overvalued using the Excess Returns lens.

Result: OVERVALUED

Our Excess Returns analysis suggests Trustmark may be overvalued by 58.1%. Discover 840 undervalued stocks or create your own screener to find better value opportunities.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Trustmark.

Approach 2: Trustmark Price vs Earnings

For profitable companies like Trustmark, the Price-to-Earnings (PE) ratio is a widely used and reliable metric for gauging value. It reflects how much investors are willing to pay for each dollar of earnings, and allows for quick comparisons between companies within the same sector.

Growth expectations and the risk profile of a company play a central role in determining whether a PE ratio is "fair." Firms anticipating robust earnings growth or possessing lower risk typically command higher PE ratios, while those facing growth headwinds or heightened uncertainty tend to trade at lower multiples.

Trustmark’s current PE ratio stands at 10.09x. For context, that is slightly below the Banks industry average of 10.98x and the peer average of 11.15x, which could suggest that the market is being a bit cautious about Trustmark’s prospects.

Simply Wall St’s “Fair Ratio” goes a step beyond basic benchmarks. It calculates what an appropriate PE should be, taking into account the company’s expected growth, its unique risks, margins, market cap, and broader industry traits. For Trustmark, the Fair Ratio is 10.09x, almost identical to its current PE. This tailored approach provides a more meaningful assessment than generic peer or industry comparisons.

Given the negligible difference between Trustmark’s actual and Fair Ratio, the stock appears to be valued about right based on its earnings profile.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1414 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Trustmark Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is a personalized story behind the numbers; it is your perspective on a company’s future, wrapped around your expectations for key financials like revenue, earnings, and margins. Narratives connect a company’s story, such as its plans for digital expansion or new market growth, to a realistic financial forecast and ultimately to an estimate of fair value.

Narratives are simple, interactive tools available to all investors on Simply Wall St’s Community page, already used by millions to shape their investment decisions. They allow you to transparently express why you believe Trustmark is headed in a certain direction, and see how your own thesis compares to others in the market. By comparing the Fair Value implied by your Narrative to the current Price, you can objectively decide whether it’s time to buy, hold, or sell.

Best of all, your Narrative stays current. As soon as new information like earnings reports or significant news emerges, your story and fair value update dynamically, ensuring your analysis is always relevant. For example, some investors believe Trustmark’s ongoing Sun Belt expansion and digital upgrades will justify a future fair value at the high end of projections, while others are more cautious and forecast only modest gains due to potential regional risks and industry headwinds.

Do you think there's more to the story for Trustmark? Head over to our Community to see what others are saying!

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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