Is It Time To Reassess Associated Banc-Corp After Its 97.4% Five Year Surge?

• If you have been wondering whether Associated Banc-Corp is still reasonably priced after its recent climb, you are not alone. This article is going to walk through what the current share price actually bakes in.
• The stock has quietly put together a solid run, up 4.8% over the last week, 5.6% over the past month, 14.7% year to date, and an impressive 97.4% over five years. This naturally raises the question of how much upside is left versus the risks on the table.
• Recently, Associated Banc-Corp has been in the spotlight for its ongoing balance sheet reshaping and capital return focus, including gradual credit quality improvements and a steady hand on loan growth in a still uncertain rate environment. Investors are reading these moves as signals that management is positioning the bank for a more stable, higher quality earnings profile, which helps explain some of the renewed interest in the shares.
• Even so, our framework gives the stock a valuation score of 2 out of 6, suggesting it only screens as undervalued on a couple of key checks. Next, we will unpack what different valuation approaches are telling us about Associated Banc-Corp today and, later on, consider a more nuanced way to think about the bank's true worth beyond the usual models.

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

Approach 1: Associated Banc-Corp Excess Returns Analysis

The Excess Returns model looks at how much profit Associated Banc-Corp can generate above the return required by shareholders, then capitalizes those surplus profits into an intrinsic value per share.

For Associated Banc-Corp, the starting point is a Book Value of $28.59 per share and a Stable EPS of $2.94 per share, based on weighted future Return on Equity estimates from 5 analysts. With an Average Return on Equity of 9.71% and a Cost of Equity of $2.33 per share, the bank is expected to generate an Excess Return of $0.61 per share on its equity base.

A Stable Book Value of $30.32 per share, derived from forecasts by 4 analysts, implies that this franchise can sustain modest growth while still earning more than its cost of capital. When these excess returns are projected and discounted, the model produces an intrinsic value of about $44.13 per share, suggesting the stock is roughly 38.7% below its current price on this basis.

Result: UNDERVALUED

Our Excess Returns analysis suggests Associated Banc-Corp is undervalued by 38.7%. Track this in your watchlist or portfolio, or discover 907 more undervalued stocks based on cash flows.

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

Approach 2: Associated Banc-Corp Price vs Earnings

For profitable banks, the price to earnings, or PE, ratio is a useful shorthand for how much investors are willing to pay for each dollar of current earnings. This makes it a natural cross check against more complex valuation models. A higher PE typically reflects stronger expected growth or lower perceived risk. Companies with slower growth or higher uncertainty usually warrant a lower, more conservative multiple.

Associated Banc-Corp currently trades at about 27.0x earnings, which is well above both the broader Banks industry average of roughly 11.9x and its peer group at about 19.1x. To move beyond simple comparisons, Simply Wall St calculates a Fair Ratio, a proprietary PE estimate that reflects the company’s specific earnings growth outlook, risk profile, profit margins, industry positioning and market capitalization. This tailored Fair Ratio for Associated Banc-Corp is 17.6x. It offers a more nuanced anchor than broad peer or sector averages, which can be skewed by outliers and structural differences.

Set against the current 27.0x PE, the 17.6x Fair Ratio suggests the market is paying a premium that looks hard to justify on fundamentals alone.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1446 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Associated Banc-Corp Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple way to connect your view of Associated Banc-Corp’s business to a clear set of forecasts and a Fair Value you can compare with today’s share price.

A Narrative is your story behind the numbers, where you spell out what you believe about the bank’s future revenue, earnings and margins, then see how those beliefs translate into a financial forecast and, ultimately, a Fair Value estimate.

On Simply Wall St’s Community page, used by millions of investors, Narratives are an accessible tool that help you decide when to buy or sell by continuously comparing each Narrative’s Fair Value to the live market price.

They also update dynamically as new information arrives, for example when Associated Banc-Corp announces a dividend increase, opens a new branch, reports stable credit costs or analysts revise their price targets and growth expectations, so your story and valuation do not go stale.

For instance, one Associated Banc-Corp Narrative might assume robust Midwestern loan growth, rising digital efficiency and place Fair Value around $29.20 per share. A more cautious Narrative could lean on lower margins, a higher risk premium and a meaningfully lower Fair Value. Seeing both helps you compare viewpoints and choose the one that best matches your own expectations before you make any decision about the stock.

Do you think there's more to the story for Associated Banc-Corp? 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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