Assessing UMB Financial (UMBF) Valuation After Recent Pullback and Acquisition Integration

UMB Financial (UMBF) shares have edged lower over the past month, continuing a modest downward trend that began earlier this year. Investors are weighing recent performance in relation to the company’s longer-term returns and ongoing annual growth.

See our latest analysis for UMB Financial.

Shares have pulled back by 4.46% over the past month and are trading at $103.99, reflecting fading near-term momentum. However, UMB Financial’s 1-year total shareholder return stands at -13.01%. Its three- and five-year total returns, at 31.2% and 62.3% respectively, indicate that the longer-term growth story remains very much alive.

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Given these mixed signals, investors are left to consider whether UMB Financial is truly undervalued, offering a potential entry point, or if its current price already reflects all foreseeable growth prospects.

Most Popular Narrative: 24.5% Undervalued

The most widely followed narrative suggests that UMB Financial’s intrinsic value sits well above its last close price of $103.99. The narrative’s fair value estimate provides a clear contrast to current trading levels and sets the stage for a closer look at what drives this optimism.

The successful integration of the Heartland (HTLF) acquisition, including vendor consolidation and conversion to the UMB platform, is expected to unlock substantial cost savings ($124 million targeted, most of which will be realized by early 2026). This is projected to materially improve operating leverage and expand net margins.

Read the complete narrative.

Want to know the story behind the valuation? Analysts are betting on powerful cost savings, a significant profit margin increase, and an ambitious bottom line target. The underlying bold multiple is central to these expectations. What is driving these standout projections? The numbers may surprise you.

Result: Fair Value of $137.69 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, regional economic slowdowns or setbacks integrating Heartland could limit UMB Financial’s ability to deliver the projected margin and revenue gains.

Find out about the key risks to this UMB Financial narrative.

Another View: Market Multiples Paint a Pricier Picture

While the fair value estimate points to UMB Financial being undervalued, a look at the price-to-earnings ratio shows a different angle. UMB Financial trades at 13.3x earnings, ahead of both the industry average (11.2x) and its peer group (12.2x). Compared to the market-driven fair ratio of 15.1x, there is still some room to move higher, but the current premium versus sector rivals could signal more limited upside unless strong growth comes through. Is the gap justified, or does it highlight valuation risk?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own UMB Financial Narrative

If you see things differently or want a hands-on look at the numbers, you can piece together your own view of UMB Financial quickly: Do it your way.

A great starting point for your UMB Financial research is our analysis highlighting 5 key rewards and 2 important warning signs 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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