Sentiment towards a sector has an under-appreciated influence in individual stock performance, and I think Fulton Financial (NASDAQ:FULT)
is a case in point. The last year has been pretty mixed for this
Pennsylvania-based bank, but its performance has been pretty close to
that of Provident (NYSE:PFS) and Valley (NYSE:VLY), with the wider group of Northeast/Mid-Atlantic comparables largely bracketed by S&T Bancorp (NASDAQ:STBA) and F.N.B. (NYSE:FNB).
All told, these banks have been benefiting from improving loan demand,
improving spreads, and a healthy credit environment, even though they
operate in a region with less population and household income growth
potential than perennial favorites like Texas, Florida, and the
Southeast.
In the specific case
of Fulton, this is an interesting time for the bank, as I feel it is
teetering on the edge of some significant developments. These aren't
make-or-break in the sense of “will this company still be here in five
years?”, but rather will have a lot to do with whether the company can
reverse a recent multiyear trend of lackluster profitability relative to
its peer group. Getting out from under a consent decree, driving
additional consolidation (internal and external), and reaping the
benefits of its asset sensitivity and expanding lending capacity could
all support meaningfully higher returns, but reversals on these drivers
could shrink the multiple and drive underperformance.
Read more here:
Fulton Financial Looking To Fulfill Its Potential
No comments:
Post a Comment