Orgeon’s Umpqua Holdings (UMPQ)
has generally been well-liked by investors, which has often meant a
less-appealing valuation compared to many peers. Between that
popularity, a less asset-sensitive balance sheet than many peers, and
general optimism on the company’s efficiency initiative, the shares
really haven’t lagged its regional banking peers all that much over the
last six or 12 months.
Looking at fourth quarter
results, Umpqua seems to be going into 2019 with some decent momentum
and attractive prospects for spread improvement on delayed repricings,
as well as further cost-reduction benefits from the NextGen process.
Although I believe Umpqua is undervalued on both a long-term earnings
basis (assuming high single-digit growth) and near-term ROTE, the degree
of undervaluation is less than for many banks in its peer group.
Read more here:
Encouraging, If Choppy, Progress At Umpqua
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