Friday, January 24, 2020

Fulton Financial Puttering Along, But Doesn't Have Much Growth Or Value Appeal

Back in July I thought that Fulton Financial (FULT) shares were fairly priced and didn’t offer much upside outside of M&A, as the near-term prospects for pre-provision profit growth were pretty lackluster. Since then, the company has made a wealth management acquisition but pre-provision profit performance has indeed been “meh”, and the shares have lagged the broader regional bank sector by about 3%, as well as the Russell 2000 and Russell 3000 by a wider margin (as a smaller company, I’d argue the Russell indices are fairer comps than the S&P 500).

I still don’t have all that much love or enthusiasm for Fulton. Guidance for 2020 sounded a little better than expected, and growth in the commercial loan pipeline is encouraging, but I think loan growth in the Pennsylvania/New Jersey/Maryland operating area could be challenging in 2020, and another rate cut is definitely a possibility. Valuation still looks pretty ordinary, though Fulton has the capital to make accretive acquisitions and there are targets out there.

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Fulton Financial Puttering Along, But Doesn't Have Much Growth Or Value Appeal

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