Renasant (RNST): Taking Stock of Valuation After a Recent Share Price Rebound

Renasant (RNST) has quietly put together a solid run this month, with the stock up about 10% while longer term returns remain mixed, inviting a closer look at what the bank is actually delivering.

See our latest analysis for Renasant.

That 10.2% 1 month share price return stands in contrast to a slightly negative 3 month share price move. At the same time, a 7.5% 1 year total shareholder return suggests momentum is tentatively rebuilding as investors reassess the bank’s growth and risk profile.

If Renasant’s recent move has you thinking about what else could be setting up for a rerating, it might be worth exploring fast growing stocks with high insider ownership.

With earnings rebounding and the share price still trading below both intrinsic value estimates and analyst targets, the key question now is whether Renasant is genuinely undervalued or if the market is already pricing in its next leg of growth.

Most Popular Narrative Narrative: 11.3% Undervalued

The most widely followed narrative sees Renasant’s fair value modestly above the last close, framing today’s price as a discount to future growth.

The merger with The First Bancshares increases scale and provides a larger footprint in regions experiencing strong small business formation, enabling Renasant to capitalize on rising entrepreneurial activity. This should enhance lending opportunities and fee income over time. Ongoing investments in digital banking and technology-driven efficiency, such as back-office automation and treasury management upgrades, are positioned to improve operating efficiency and net margins as integration cost saves are realized throughout the next year.

Read the complete narrative.

Want to see what powers that premium narrative? It leans on ambitious revenue expansion, rising margins, and a lower future earnings multiple than many regional peers.

Result: Fair Value of $41.83 (UNDERVALUED)

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

However, that upside case still hinges on smooth merger execution and resilient Southeastern credit trends. Both of these factors could quickly undermine the current valuation argument.

Find out about the key risks to this Renasant narrative.

Another Lens On Valuation

Strip out the growth story and look just at today’s earnings, and the picture gets trickier. Renasant trades on about 24 times earnings versus 16.9 times for peers and a fair ratio of 20 times, implying investors are already paying up and leaving less margin for error.

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

Build Your Own Renasant Narrative

If you have a different view or prefer to dig into the numbers yourself, you can shape a custom narrative in minutes: Do it your way.

A great starting point for your Renasant research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

Ready for more high conviction ideas?

Do not stop at one bank when smarter possibilities are waiting; use the Simply Wall Street Screener to uncover focused opportunities that match your strategy.

• Target reliable income streams by scanning these 13 dividend stocks with yields > 3% that may help strengthen the defensive core of your portfolio.
• Capitalize on market mispricing by reviewing these 915 undervalued stocks based on cash flows where cash flows and fundamentals point to potential upside.
• Position ahead of financial innovation by assessing these 80 cryptocurrency and blockchain stocks poised to benefit from blockchain and digital asset adoption.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com