BPOP

Analysis of Popular, Inc. (BPOP)

Technical Perspective BPOP shows strong recovery momentum, trading near its 52-week high with recent monthly gains, though it has modestly underperformed the market over three months. The low beta indicates relative stability, but proximity to resistance levels suggests potential for a pullback. Its significant recovery from past drawdowns highlights resilience but warrants caution at current levels.

Fundamental Health The company exhibits solid revenue growth and improving profitability, supported by a conservative debt profile. However, the low interest coverage ratio raises concerns about earnings adequacy for debt servicing, and operational metrics like ROE and asset turnover are typical for a bank but not standout. Overall, fundamentals are stable but not exceptional.

Valuation & Risk Valuation appears reasonable with a forward PE under 10, though the high PEG ratio implies growth may already be priced in. The lack of peer data limits comparative insight. Risks are moderated by low volatility and minimal short interest, but sector-specific risks like interest rate sensitivity remain relevant for this regional bank.

Investment Recommendation

Consider Buying on Pullbacks

BPOP presents a compelling case with reasonable valuation, earnings growth, and financial stability, but its current price near yearly highs limits upside potential. Investors might consider accumulating shares on any market-driven dips toward the $115–$120 range, where risk-reward improves. It suits those seeking exposure to a steady regional bank with moderate growth, though sector risks should be monitored.

RockFlow Model Forecast: Three Scenarios for 2026

Based on the analysis, here is a 12-month outlook for Popular, Inc. (BPOP):

12-Month Outlook for BPOP

BPOP's outlook is stable but cautious, with near-term performance capped after its recent run to 52-week highs. Key catalysts include its reasonable valuation and potential for continued steady earnings growth, which could be bolstered by stable interest rates. The primary risk is its sensitivity to broader economic and interest rate fluctuations, which could pressure the regional banking sector and potentially trigger a pullback towards more attractive entry points like $115-$120. While a definitive target is unavailable, upside appears limited from the current level, suggesting a neutral to slightly positive return is most likely, contingent on avoiding a significant sector downturn.

Wall Street Consensus

Most Wall Street analysts are optimistic about BPOP's 12-month outlook, with consensus target around $126.26, 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 overall performance with significant gains from its lows despite recent volatility relative to the broader market.

The stock has shown robust short-term momentum with a 9.64% gain over the past month, though its 3-month performance of 2.01% trails the market by 1.72%, indicating recent underperformance relative to broader indexes despite positive absolute returns. BPOP's low beta of 0.648 suggests its movements have been less volatile than the overall market.

Currently trading at $127.83, BPOP sits near the upper end of its 52-week range ($78.23-$131.10), approximately 97% toward its yearly high, suggesting potential vulnerability near resistance levels. The 23.23% maximum drawdown over the past year highlights the stock's recovery trajectory despite earlier declines.

Revenue & Profitability: BPOP demonstrated strong revenue growth with revenue increasing from $1.11 billion in Q2 to $1.16 billion in Q3 2025, a sequential improvement of approximately 4%. Profitability also strengthened considerably, as the net income ratio expanded from 18.9% to 19.98%, driven by a lower effective tax rate and solid operational control. This indicates healthy top-line momentum translating effectively to the bottom line.

Financial Health: The company maintains a conservative debt profile with a low debt-to-equity ratio of 0.23, signifying minimal reliance on leverage. However, the interest coverage ratio of 0.83 is a point of concern as it indicates EBIT is insufficient to comfortably cover interest expenses. Operating cash flow generation appears adequate, but the low cash ratio suggests limited liquidity from cash and equivalents alone.

Operational Efficiency: BPOP's return on equity of 3.78% is modest, reflecting moderate profitability relative to shareholder equity. The asset turnover ratio is very low at 0.015, which is typical for a bank and indicates a capital-intensive business model focused on holding interest-earning assets rather than high-volume sales. Overall, operational efficiency metrics are characteristic of a financial institution rather than showcasing exceptional performance.

Valuation Level

BPOP's valuation appears modest with a trailing PE of 11.3x and a forward PE of 9.3x, indicating expected earnings growth. The price-to-book ratio of 1.39x suggests the stock is trading slightly above its tangible asset value, while a price-to-sales ratio of 2.95x reflects a moderate market valuation relative to revenue. Overall, the single-digit forward PE points toward reasonable valuation levels, though the elevated PEG ratio near 5.0 signals that growth expectations may already be priced in.

Peer Comparison

A direct peer comparison cannot be provided as the industry average data is unavailable. Without benchmark ratios for the financial sector, it is impossible to determine whether BPOP's valuation multiples represent a premium or discount relative to its industry peers. The analysis would benefit from contextual industry data to make a meaningful comparative assessment.

Volatility Risk: BPOP exhibits below-average volatility risk with a beta of 0.648, indicating it is less volatile than the broader market. However, investors should note its one-year maximum drawdown of -23.23%, which demonstrates a meaningful potential for capital loss during adverse market conditions. This combination suggests the stock is relatively stable but not immune to significant downturns.

Other Risks: The notable absence of significant short interest implies a general market consensus regarding the stock's valuation, reducing the risk of a short squeeze. Investors should, however, assess broader risks inherent to the regional banking sector, such as exposure to interest rate fluctuations and credit quality, as these remain the primary risk drivers.