Is Associated Banc-Corp (ASB) Undervalued? A Closer Look at Its Recent Valuation Signals

Associated Banc-Corp (ASB) has recently drawn attention as investors weigh its steady performance metrics against the broader backdrop of the regional banks sector. Conversations are focusing on how recent returns compare over shorter and longer timeframes.

See our latest analysis for Associated Banc-Corp.

Over the past year, Associated Banc-Corp’s total shareholder return jumped 27.4%, outpacing its share price rise and reflecting renewed optimism in the regional banking space. The stock’s upward momentum since the beginning of the year suggests growing confidence from investors.

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With shares trading at a notable discount to analyst targets and recent financial growth beating expectations, investors are left to wonder: Is Associated Banc-Corp undervalued, or has the market already accounted for its future prospects?

Most Popular Narrative: 8.7% Undervalued

With Associated Banc-Corp’s fair value from the most widely followed narrative coming in at $28.60, the stock’s last close at $26.10 is still below these expectations. This suggests a gap that points to possible upside if the company delivers on the narrative’s core projections.

The company's strategic pivot toward growing commercial and industrial (C&I) lending, replacing lower-yielding residential balances with higher-yielding, relationship-focused assets, is driving record net interest income and margin expansion. This is positioning the balance sheet for sustained profitability growth and is likely to positively impact revenue and net margins.

Read the complete narrative.

Curious how bold lending moves and digital investments translate into this upbeat valuation? Find out which unprecedented growth rates analysts are penciling in, and why the future profit margins and share count are front and center in this story. The key numbers behind this fair value might surprise you.

Result: Fair Value of $28.60 (UNDERVALUED)

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

However, persistent regulatory uncertainty or challenges in keeping digital pace with larger banks could quickly temper Associated Banc-Corp's current growth outlook.

Find out about the key risks to this Associated Banc-Corp narrative.

Another View: What Do Valuation Ratios Say?

While one narrative points to Associated Banc-Corp being undervalued, its price-to-earnings ratio sits at 33.5x, which is well above both the US Banks industry average of 11.7x and its peer group at 25.3x. Even compared to its fair ratio of 19.6x, shares look expensive. Does this premium signal quality, or could it spell disappointment if expectations aren't met?

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

Build Your Own Associated Banc-Corp Narrative

If this valuation does not match your outlook or you want to dig deeper into the numbers yourself, there is a quick and easy way to craft your own story in just a few minutes: Do it your way.

A great starting point for your Associated Banc-Corp research is our analysis highlighting 2 key rewards and 3 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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