Republic Bancorp trades at $73.63 and has moved in lockstep with the market. Its shares have returned 14.2% over the last six months while the S&P 500 has gained 14.9%.
Is now the time to buy Republic Bancorp, or should you be careful about including it in your portfolio? Get the full breakdown from our expert analysts, it’s free.
Why Is Republic Bancorp Not Exciting?
We don't have much confidence in Republic Bancorp. Here are three reasons you should be careful with RBCAA and a stock we'd rather own.
1. Projected Net Interest Income Growth Is Slim
Forecasted net interest income by Wall Street analysts signals a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.
Over the next 12 months, sell-side analysts expect Republic Bancorp’s net interest income to rise by 2%, a deceleration versus its 8.1% annualized growth for the past two years. This projection is below its 8.1% annualized growth rate for the past two years.
2. Substandard TBVPS Growth Indicates Limited Asset Expansion
Tangible book value per share (TBVPS) serves as a key indicator of a bank’s financial strength, representing the hard assets available to shareholders after removing intangible assets that could evaporate during financial distress.
Disappointingly for investors, Republic Bancorp’s TBVPS grew at a mediocre 10% annual clip over the last two years.
3. Projected TBVPS Growth Is Slim
A bank’s tangible book value per share (TBVPS) increases when it generates higher net interest margins and keeps credit losses low, allowing it to compound shareholder value over time.
Over the next 12 months, Consensus estimates call for Republic Bancorp’s TBVPS to grow by 7.3% to $56, mediocre growth rate.
Final Judgment
Republic Bancorp isn’t a terrible business, but it isn’t one of our picks. That said, the stock currently trades at 1.3× forward P/B (or $73.63 per share). This valuation multiple is fair, but we don’t have much faith in the company. We're fairly confident there are better investments elsewhere. Let us point you toward a safe-and-steady industrials business benefiting from an upgrade cycle.
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