Bank of America just raised its EUR/USD forecast
On Friday, Evercore ISI analysts revised their stance on Cullen/Frost Bankers (NYSE:CFR), a $7.9 billion regional bank trading at a P/E ratio of 12.8x, upgrading the stock from Underperform to In Line and slightly increasing the price target to $132 from $130. The upgrade follows the bank’s first-quarter results of 2025, which prompted Evercore ISI to adjust its earnings per share (EPS) estimates for 2025 and 2026 upwards by 5% and 2%, respectively. According to InvestingPro data, four analysts have recently revised their earnings estimates upward for the upcoming period, supporting this positive outlook.
The analysts cited several reasons for the more positive outlook, including an improved top-line forecast. This is partly due to net interest income (NII) benefits from firm balance sheet trends, despite expectations of declining interest rates and the bank’s asset sensitivity. They also noted Cullen/Frost’s growing fee income and the waning expense pressures from the bank’s franchise buildout as factors contributing to a more efficient operation. The bank has demonstrated strong financial stability, maintaining dividend payments for 33 consecutive years with a current yield of 3.16%.
Additionally, the analysts highlighted Cullen/Frost’s solid credit trends, which they consider a testament to the bank’s conservative credit culture. They also pointed out that the bank’s returns continue to compare favorably against its peers. InvestingPro analysis shows the bank maintains a "GOOD" overall financial health score, with particularly strong marks in profitability metrics. Despite potential headwinds from a sluggish macroeconomic environment and declining short-term interest rates, which may limit significant upside catalysts, Evercore ISI believes that the risk of underperformance relative to peers is reduced due to the strengthening of Cullen/Frost’s fundamental outlook.
In terms of valuation, the analysts find Cullen/Frost’s shares to be fairly priced at 12.1 times their updated 2026 EPS estimate and 2.2 times tangible book value (TBV), compared to industry peers trading at 9.3 times EPS and 1.3 times TBV. The new price target of $132 implies a multiple of 13.3 times the 2026 EPS estimate. Based on comprehensive InvestingPro analysis, which includes over 30 financial metrics and a detailed Pro Research Report available to subscribers, the stock appears to be trading near its Fair Value.
In other recent news, Cullen/Frost Bankers reported strong financial results for the first quarter of 2025, with earnings per share (EPS) of $2.30, exceeding the forecasted $2.15. The company’s revenue also surpassed expectations, coming in at $560.41 million compared to the anticipated $538.79 million. These results reflect successful loan and deposit growth and have led to an optimistic revenue outlook for the remainder of the year. In light of these developments, Stephens analyst Matt Olney raised the price target for Cullen/Frost to $141, maintaining an Equal Weight rating. Meanwhile, DA Davidson’s Peter Winter also increased the price target to $135, holding a Neutral rating, citing the bank’s consistent performance in surpassing consensus estimates over the past 25 quarters. However, not all analysts share this optimism; Citi analysts lowered their price target to $109 and maintained a Sell rating, expressing concerns about the impact of Cullen/Frost’s growth strategy on near-term earnings. Despite varying analyst opinions, the bank’s strategic expansion and solid financial performance continue to draw attention from investors.
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