Valley National Bancorp (VLY) Stock Looks Like A Bargain On Fair Value And Earnings
Valley National Bancorp stock has delivered a strong 62.3% return over the past three years, yet the current checks suggest the market price may still sit below an intrinsic value estimate that points to the shares screening as undervalued.
- Over the past three years, Valley National Bancorp has returned 62.3%, which puts recent short term pullbacks into the context of a solid multi year gain.
- The upcoming earnings release, with attention on profitability, loan growth and credit quality, can support the valuation case if it aligns with current expectations. Any sign of pressure on net interest margins or deposit trends may weigh on what investors are willing to pay for the stock.
- On Simply Wall St's broader checks, Valley National Bancorp looks inexpensive, with the stock screening as undervalued in 5 of 6 valuation measures, and an Excess Returns intrinsic value estimate that also indicates the shares trade at a discount.
The issue now is whether Valley National Bancorp's current price already captures these fundamentals or still leaves a meaningful margin between market price and intrinsic value.
Is Valley National Bancorp Still Cheap on Excess Returns?
The Excess Returns model evaluates how much profit Valley National Bancorp can generate above the return that shareholders require. For this stock, the key inputs point to a bank expected to earn more on its equity than its estimated cost of capital, which feeds into the intrinsic value estimate.
Valley National Bancorp is modeled with Book Value of $13.67 per share and Stable EPS of $1.53 per share, based on weighted future Return on Equity estimates from 9 analysts. Against a Cost of Equity of $1.07 per share, that leaves an Excess Return of $0.46 per share and an Average Return on Equity of 10.18%. The stable phase assumes a Stable Book Value of $14.99 per share, using estimates from 10 analysts. Together, these inputs produce an Excess Returns intrinsic value of $27.88 per share, which implies the stock is 48.6% undervalued relative to the current price. The Q2 2026 preview, with EPS estimated at $0.31, helps explain why expectations for profitability still support a valuation premium to where the shares trade today.
On these Excess Returns assumptions, Valley National Bancorp stock screens as undervalued versus its intrinsic value estimate.
Our Excess Returns analysis suggests Valley National Bancorp is undervalued by 48.6%. Track this in your watchlist or portfolio, or discover 49 more high quality undervalued stocks.
Does Valley National Bancorp Look Undervalued on Earnings?
The P/E ratio is usually a straightforward way to compare how the market is pricing Valley National Bancorp against other listed banks. On this measure, Valley National Bancorp trades on about 11.9x earnings, which is close to the broader banks industry average of roughly 11.9x and below the peer group average of about 15.2x.
The tailored Fair P/E Ratio for Valley National Bancorp is estimated at 15.0x, which is higher than the current 11.9x multiple. This suggests the stock trades at a discount to a level that could be considered consistent with its size, risk profile and earnings outlook. That gap indicates investors are paying less for each dollar of Valley National Bancorp earnings than the model suggests might be reasonable, even after considering sector norms.
On the P/E multiple, Valley National Bancorp stock currently appears undervalued relative to the level implied by the Fair P/E estimate.
See what the numbers say about this price — find out in our valuation breakdown.
The Valley National Bancorp Narrative: What Would Justify Today's Price?
Simply Wall St Narratives for Valley National Bancorp pick up where the valuation puzzle leaves off by explaining which combinations of future growth, margins, and earnings would make Valley National Bancorp's stock worth materially more or less than today's price. These narratives are available on the company’s Community page. Where a single ratio or model outputs one figure, these narratives unpack the future that figure assumes so you can monitor whether those conditions actually play out over time.
Share a Narrative on Valley National Bancorp to add your voice to the Simply Wall St community, presenting a number-driven view on whether the expected earnings and revenue outcomes from the upcoming results align with what the current valuation implies. It is a chance to set out your thesis now and then track how it holds up as net interest margin trends, loan growth, credit quality, deposit dynamics and management guidance are reported and updated over time.
Do you think there's more to the story for Valley National Bancorp? Head over to our Community to see what others are saying!
The Bottom Line
For Valley National Bancorp, both the Excess Returns intrinsic value estimate and the P/E based view point in the same direction, with the stock screening as undervalued on each framework. That alignment, together with broadly supportive valuation checks, suggests the current discount reflects how cautiously the market is treating its earnings and balance sheet prospects rather than a clear red flag from the models. What matters most from here is whether profitability, credit quality and deposit trends in upcoming results are strong enough to keep investors confident that the return on equity assumptions behind the intrinsic value estimate remain realistic.
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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