M&T Bank Is Charting A Different Course For The Early Part Of The Tightening Cycle

 

Even with some noisy quarters, delays in moving forward with the People’s United (PBCT) deal, and odd guidance for 2022, M&T Bank (MTB) has done alright since my last update, as I believe investors have come back around to the value creation and growth opportunities in front of the bank across the upcoming tightening cycle.

With the shares up about a third and outperforming the peer group by over 20% since my last update, I definitely can’t make quite the same relative value call as before. I do still believe in a mid-single-digit core earnings growth rate after the PBCT deal, and I still think the shares are priced for a double-digit long-term annualized total return that is comfortably above the long-term norms for banks and likely still market-beating. That said, the nearer-term undervaluation is less dramatic now, and this would be more of a “hold” now if not for the longer-term potential I see in the post-PBCT model.

 

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M&T Bank Is Charting A Different Course For The Early Part Of The Tightening Cycle