A Look At Columbia Banking System (COLB) Valuation After New Buyback And Increased HoldCo Investment
Columbia Banking System (COLB) is back in focus after authorizing a $700 million share repurchase program and drawing increased interest from institutional investor HoldCo Asset Management, developments that income-focused bank investors are watching closely.
See our latest analysis for Columbia Banking System.
The share price has been relatively steady at US$28.19, with a 90 day share price return of 7.64% and a 1 year total shareholder return of 8.69%. This suggests momentum is building gradually as investors weigh the new buyback program and HoldCo’s larger position.
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With an intrinsic value estimate that sits well above the current US$28.19 share price and only a modest 8% discount to the average analyst target, the key question is whether COLB is still cheap or if the market is already pricing in future growth potential.
Most Popular Narrative: 4.8% Undervalued
With Columbia Banking System's fair value estimated at about US$29.62 compared to a US$28.19 last close, the most followed narrative sees modest upside driven by specific earnings and valuation assumptions.
The analysts have a consensus price target of $28.333 for Columbia Banking System based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $35.0 and the most bearish reporting a price target of just $25.0.
Want to see what is behind that split view? The core of this narrative is expectations of stronger profit growth, wider margins, and a future earnings multiple that narrows the gap.
Result: Fair Value of $29.62 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, that optimistic outlook could be affected if integration efforts face setbacks or if funding pressures and changes in the deposit mix reduce net interest margins more than expected.
Find out about the key risks to this Columbia Banking System narrative.
Build Your Own Columbia Banking System Narrative
If you are not fully aligned with this view or simply prefer to work from the raw numbers yourself, you can build a custom thesis in just a few minutes by starting with Do it your way.
A great starting point for your Columbia Banking System research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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