Does First Commonwealth Offer Value After Recent Share Price Rebound in 2025?

• If you have been wondering whether First Commonwealth Financial is quietly trading at a bargain or already priced for perfection, you are not alone.
• The stock closed at $16.50 recently, with returns of 7.9% over the last month but still down 8.8% over the past year, a pattern that hints at shifting views on its growth prospects and risk profile.
• Recent headlines around regional banks have focused on balance sheet resilience, deposit stability, and how smaller lenders are navigating a higher interest rate environment. First Commonwealth Financial has been part of that conversation. Investors have been weighing its loan growth strategy and credit quality against broader sector worries. This context helps explain the choppy but improving share price performance.
• Right now, the company scores a 4/6 valuation check rating, suggesting it screens as undervalued on most of the measures we track. In the sections that follow we will unpack those valuation approaches and outline a more detailed way to think about what the stock might be worth by the end of the article.

Find out why First Commonwealth Financial's -8.8% return over the last year is lagging behind its peers.

Approach 1: First Commonwealth Financial Excess Returns Analysis

The Excess Returns model asks a simple question: is First Commonwealth Financial generating profits above the return its shareholders reasonably demand on their capital, and can it sustain that edge? It starts from the company’s book value of $14.83 per share and a stable earnings power of $1.74 per share, based on weighted future Return on Equity estimates from 4 analysts.

Against a cost of equity of $1.12 per share, this implies an excess return of $0.62 per share, supported by an average Return on Equity of 10.83%. Analysts also expect the stable book value to rise to $16.07 per share over time, again using weighted estimates from 4 analysts. Together, this suggests First Commonwealth can keep compounding shareholder capital at a rate above its equity cost rather than just treading water.

Feeding these assumptions into the Excess Returns framework produces an intrinsic value of about $32.93 per share. With the stock recently trading around $16.50, the model implies the shares are roughly 49.9% undervalued, leaving a wide margin between current price and estimated long term value.

Result: UNDERVALUED

Our Excess Returns analysis suggests First Commonwealth Financial is undervalued by 49.9%. Track this in your watchlist or portfolio, or discover 930 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 First Commonwealth Financial.

Approach 2: First Commonwealth Financial Price vs Earnings

For a consistently profitable bank like First Commonwealth Financial, the price to earnings, or PE, ratio is a useful yardstick because it directly links what investors pay today to the profits the business is generating each year. In general, companies with stronger and more reliable growth, and lower perceived risk, can justify a higher PE multiple, while slower growing or riskier names tend to trade on lower multiples.

First Commonwealth currently trades on a PE of 11.91x, which is slightly above the broader Banks industry average of about 11.48x, but a touch below the peer group average of 12.26x. To refine this view, Simply Wall St calculates a Fair Ratio of 12.76x. This is the PE that might be expected once factors like its earnings growth outlook, profit margins, risk profile, size, and banking industry dynamics are taken into account.

This Fair Ratio is more informative than a simple peer or industry comparison because it adjusts for the specific strengths and weaknesses of First Commonwealth rather than assuming all banks deserve the same multiple. With the current PE sitting below the Fair Ratio, the shares appear modestly undervalued on this metric.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your First Commonwealth Financial Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, an easy way to connect your view of a company with the numbers behind it. A Narrative is simply your story about First Commonwealth Financial, translated into a concrete forecast of future revenue, earnings, and profit margins, which then leads to an explicit fair value per share. On Simply Wall St, millions of investors build and compare Narratives on the Community page, where each Narrative clearly links the company’s business drivers to a financial model and a resulting Fair Value that can be weighed against today’s share price to inform a decision to buy, hold, or sell. These Narratives update automatically as fresh news, earnings, or regulatory changes arrive, so your view does not go stale. For example, one investor might see rapid digital adoption and fee income growth justifying a fair value near $19.20, while another, more cautious about regional and regulatory risks, could anchor on a meaningfully lower number.

Do you think there's more to the story for First Commonwealth Financial? 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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