ConnectOne Bancorp (CNOB) is back on many investors’ screens after recent share price moves, with the stock showing mixed short term performance and a stronger total return picture over the past 3 months.
See our latest analysis for ConnectOne Bancorp.
At a latest share price of US$27.75, ConnectOne Bancorp’s recent 18.31% 90 day share price return and 6.29% 1 year total shareholder return suggest that momentum has been building off a relatively steady longer term base.
If this banking stock has you reassessing where opportunity might lie next, it could be a good moment to scan our list of 23 top founder-led companies as potential additions to your watchlist.
With ConnectOne Bancorp trading at US$27.75 and an indicated intrinsic discount, as well as additional room compared to the US$31.70 analyst target, the key question is whether shares remain undervalued or if the market is already fully pricing in future growth.
Most Popular Narrative: 12.5% Undervalued
With ConnectOne Bancorp’s fair value narrative sitting at US$31.70 against a last close of US$27.75, the current price leaves a gap that this widely followed view tries to explain through assumptions on growth, margins and risk.
The pipeline for commercial, SBA, construction, and residential loans is described as "strong," with loan growth opportunities and high current loan yields, highlighting potential for future revenue growth and improved earnings as the expanded footprint leverages secular economic and population growth in the New York and New Jersey regions.
Curious what kind of revenue ramp and profit margins need to line up for that fair value to hold? The narrative leans on confident growth curves, richer earnings power and a future earnings multiple that may surprise you. The full story is in how those pieces fit together.
Result: Fair Value of US$31.70 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, the story could shift quickly if commercial real estate credit issues start to bite, or if integration and regulatory costs eat into the expected earnings power.
Find out about the key risks to this ConnectOne Bancorp narrative.
Another Way To Look At The Valuation
If you shift from the DCF view to a simple earnings multiple, the picture changes. At a P/E of 18.7x, ConnectOne Bancorp trades above the US Banks industry at 11.9x, above peers at 14x, and slightly above its own 18.2x fair ratio, which points to less margin for error if sentiment cools.
See what the numbers say about this price — find out in our valuation breakdown.
Next Steps
Mixed signals on value and risk here, so if this has your attention, take a moment to review the full picture yourself and weigh up the trade off between 3 key rewards and 2 important warning signs.
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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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