Banks with legitimately better models can do quite well, as seen at names like Bank OZK (OZK), First Republic (FRC), and SVB Financial (SIVB), and I made the case a year ago that Pinnacle Financial Partners (PNFP) belonged in that group, as this Southeastern-focused bank is using an intensely high-touch service model to gain loan and deposit share in attractive markets across the Southeast like Nashville, Charlotte, Raleigh-Durham, and Atlanta. While 2020 was a hard year for Pinnacle too, the bank has emerged with the growth story very much intact.
Pinnacle shares are up about 15% from when I last wrote on the stock, basically matching the S&P 500, but outperforming most of the bank’s peer group. While valuation looks high at first glance, and expectations are indeed elevated, I believe there’s a path here to double-digit long-term earnings growth that can support attractive returns from here, I think a mid-$80’s fair value is quite reasonable now.
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Pinnacle Financial Partners Still Offers Exceptional Upside On Southeastern Share Growth
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