Argus has revised its price target for Regions Financial (RF, Financial), lowering it from $27 to $25, while maintaining a Buy rating on the stock. This adjustment is attributed to the unpredictable macroeconomic landscape, which has led to challenges for regional banks.
In 2025, regional banks, including Regions Financial, have encountered lending pressures due to sluggish loan demand, steady utilization, and asset runoff. Despite these hurdles, Argus perceives the recent market retreat as a potential opportunity for investment in larger regional banks, suggesting possible long-term value for investors.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 20 analysts, the average target price for Regions Financial Corp (RF, Financial) is $24.19 with a high estimate of $30.00 and a low estimate of $21.00. The average target implies an upside of 21.97% from the current price of $19.83. More detailed estimate data can be found on the Regions Financial Corp (RF) Forecast page.
Based on the consensus recommendation from 23 brokerage firms, Regions Financial Corp's (RF, Financial) average brokerage recommendation is currently 2.3, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Regions Financial Corp (RF, Financial) in one year is $23.47, suggesting a upside of 18.36% from the current price of $19.83. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Regions Financial Corp (RF) Summary page.
RF Key Business Developments
Release Date: April 17, 2025
- Quarterly Earnings: $465 million, resulting in earnings per share of $0.51.
- Adjusted Earnings: $487 million, with adjusted earnings per share of $0.54.
- Pre-Tax Pre-Provision Income: $745 million, a 21% increase year over year.
- Return on Tangible Common Equity: 18%.
- Average Loans: Relatively stable quarter over quarter; ending loans declined 1%.
- Average Consumer Loans: Decreased approximately 1% in the first quarter.
- Average Deposit Balances: Grew 1% linked quarter; ending balances increased 3%.
- Net Interest Income: Declined 3% linked quarter; projected to grow approximately 3% in the second quarter.
- Adjusted Non-Interest Income: Remained stable linked quarter.
- Adjusted Non-Interest Expense: Increased approximately 1% compared to the prior quarter.
- Provision Expense: Approximately equal to net charge-offs at $124 million.
- Allowance for Credit Losses Ratio: Increased 2 basis points to 1.81%.
- Common Equity Tier 1 Ratio: Estimated at 10.8%.
- Share Repurchases: $242 million executed during the quarter.
- Common Dividends: $226 million paid during the quarter.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Regions Financial Corp (RF, Financial) reported strong quarterly earnings of $465 million, with adjusted earnings of $487 million.
- The company achieved a 21% year-over-year increase in pre-tax pre-provision income, reaching $745 million.
- Regions Financial Corp (RF) delivered a return on tangible common equity of 18%, the highest among peers for the last four years.
- The company has a robust capital position, with a common equity Tier 1 ratio of 10.8%, and strong organic capital generation.
- Regions Financial Corp (RF) experienced growth in average deposit balances, which increased by 3% at the end of the quarter.
Negative Points
- Average loans declined by 1% at the end of the quarter, with a stable outlook for the full year 2025.
- Net interest income declined by 3% linked quarter, driven by lower loan balances and less origination fee activity.
- The capital markets business faced challenges, with lower M&A, real estate capital markets, and loan syndication activity.
- Provision expense was equal to net charge-offs at $124 million, with an increase in the allowance for credit losses ratio to 1.81%.
- The outlook for unemployment has increased, and there is an expectation for a pronounced slowdown in GDP growth, creating uncertainty for clients.
