Pinnacle Financial Partners Undervalued, But Arguably Out Of Step With A Nervous Market

Pinnacle Financial Partners (NASDAQ:PNFP) has been an underperformer since my last update on this fast-growing Southeastern bank. While sentiment on banks in general hasn’t been great, and several notable growth banks (First Republic (FRC), Signature (SBNY), and SVB Financial (SIVB)) have seen even worse performance, the nearly 15% decline in Pinnacle is disappointing in the context of ongoing execution of a well-founded model with a long runway for growth.

I can come up with at least a few reasons for some weakness in Pinnacle shares – the bank’s above-average deposit beta, aggressive opex spending growth, and dependence on loan growth among them – but even against a tougher backdrop for 2023/24, I think the shares still look attractive for growth-oriented investors willing to take on additional risk in pursuit of above-average returns.

 

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Pinnacle Financial Partners Undervalued, But Arguably Out Of Step With A Nervous Market