BPOP

Based on a comprehensive analysis of BPOP (Banco Popular), the stock presents a compelling case for consideration.

Technical Analysis: BPOP is showing strong bullish momentum, having surged over 12% in the past month to trade near its 52-week high. While its proximity to this peak suggests the current uptrend is mature, its low beta of 0.685 indicates these gains have been achieved with less volatility than the broader market. This recent strength marks a significant recovery, though it has slightly lagged the market over a three-month horizon.

Fundamental Analysis: Fundamentally, BPOP is solid. The bank reported healthy Q3 revenue growth and a meaningful expansion in its net profit margin to nearly 20%, boosting EPS. It maintains a conservative debt-to-equity ratio and strong cash flow. A minor concern is its modest interest coverage ratio, but overall, the company demonstrates improved operational efficiency and profitability.

Valuation & Risk: Valuation appears attractive, with a forward P/E of 9.4 and a PEG ratio of 0.51 signaling potential undervaluation relative to growth prospects. Risks are typical for a regional bank, including sensitivity to interest rates and economic cycles, but are mitigated by the stock's low beta and low short interest, indicating stable market sentiment.

Buy Recommendation: BPOP is a worthwhile buy for investors seeking exposure to a profitable regional bank. Its combination of strong recent operational performance, attractive valuation metrics, and lower volatility profile is appealing. While mindful of general banking sector risks and the stock's position near a 52-week high, the positive fundamentals and value proposition support a bullish outlook for the medium term.

*Note: This is not investment advice, for reference only.*

RockFlow Model Forecast: Three Scenarios for 2026

Based on the provided analysis, the 12-month outlook for BPOP (Banco Popular) is positive. Key catalysts include continued operational efficiency driving margin expansion and EPS growth, supported by an attractive valuation with a low forward P/E and PEG ratio suggesting upside potential. Primary risks remain tied to the broader banking sector, specifically sensitivity to interest rate changes and potential economic softening. Given the strong fundamentals and analyst consensus, the stock appears well-positioned to approach its target price range of $140 - $145, representing a potential ~15% upside from the current price.

Wall Street Consensus

Most Wall Street analysts are optimistic about BPOP's 12-month outlook, with consensus target around $143.11, indicating expected upside potential.

Overall, BPOP has investment potential but also faces challenges. Here are key factors to weigh before investing.

BPOP has demonstrated strong momentum recently, reaching near its 52-week high following a substantial rally over the past month. The stock has delivered robust absolute gains, though its relative performance against the broader market over the medium term has been slightly negative. Overall, this represents a significant recovery from its 52-week low.

Short-term performance is notably bullish, with BPOP surging 12.32% over the past month, sharply reversing the relatively flat 0.21% gain over three months. However, this recent strength has not fully compensated for its earlier underperformance, as indicated by a negative 3-month relative strength versus the market of -4.19%, suggesting it has lagged the broader market trend.

Currently trading at $125.95, BPOP sits near the upper end of its 52-week range ($78.23 - $129.32), approximately 97% of the way to its high. While not technically overbought, its proximity to the yearly peak indicates a mature bullish move, and its low beta of 0.685 suggests the stock has exhibited less volatility than the market during this advance.

BPOP demonstrates solid revenue growth and profitability improvement in Q3 2025, with revenue increasing to $1.16 billion from $1.11 billion in Q2. The net profit margin expanded significantly to 19.98% from 18.92%, reflecting improved operational efficiency despite a slight compression in gross margin. This margin expansion translated directly to higher EPS, which increased from $3.09 to $3.15 quarter-over-quarter.

The company maintains a conservative debt structure with a low debt-to-equity ratio of 0.23 and strong cash generation, evidenced by an operating cash flow per share of $2.87. However, the interest coverage ratio of 0.83 remains a concern, indicating limited earnings cushion for interest obligations despite the manageable debt levels. The cash flow to debt ratio of 0.14 suggests adequate but not robust coverage of debt obligations.

Operational efficiency metrics show mixed results, with ROE improving to 3.78% but asset turnover remaining low at 0.015, reflecting the capital-intensive nature of banking operations. The company's equity multiplier of 12.27 indicates substantial leverage through depositor funds rather than debt, which is typical for financial institutions but warrants monitoring given the modest interest coverage.

Valuation Level: Banco Popular's valuation metrics suggest an attractive value proposition. The TTM and forward P/E ratios of 11.2 and 9.4, respectively, indicate the stock is trading at a modest earnings multiple, further supported by a PEG ratio of 0.51 which signals potential undervaluation relative to expected growth. While the P/B ratio of 1.38 reflects a moderate premium to book value, it remains at reasonable levels for a profitable financial institution.

Peer Comparison: Without specific industry average data available for comparison, a definitive peer-based assessment cannot be provided. However, the valuation metrics presented—particularly the single-digit forward P/E and sub-1.0 PEG ratio—generally align with what would be considered favorable within the regional banking sector relative to broader market averages. These ratios typically compare well against industry benchmarks for profitable banks with stable growth prospects.

BPOP exhibits lower volatility risk relative to the broader market, as evidenced by a beta of 0.685, suggesting its price movements are less pronounced. However, the stock's maximum drawdown of -22.63% over the past year highlights a significant potential for capital depreciation during market downturns, underscoring the inherent downside risk even for a lower-beta stock.

The stock faces limited immediate pressure from short sellers, with a low short interest of 2.39% indicating generally positive market sentiment. While this low short interest is favorable, typical risks for a bank stock like BPOP include its susceptibility to interest rate changes, credit quality deterioration within its loan portfolio, and broader economic cycles influencing its performance.