• If you are wondering whether F.N.B at US$16.86 is still offering value after its recent run, you are not alone. This article is intended to help you frame that question clearly.
• The stock has returned 4.2% over the last 7 days, is roughly flat over 30 days with a 0.2% decline, is down 1.9% year to date, and shows a 51.4% return over 1 year, 65.0% over 3 years and 56.4% over 5 years.
• Recent headlines around F.N.B have kept the stock on investors' radar, adding fresh context to these mixed shorter term and stronger longer term returns. This backdrop makes it especially important to separate sentiment from what the numbers imply about value.
• On Simply Wall St's valuation checks, F.N.B has a valuation score of 5 out of 6. The next sections will walk through the main valuation methods behind that score, before finishing with a more complete way to think about what the market is pricing in.

F.N.B delivered 51.4% returns over the last year. See how this stacks up to the rest of the Banks industry.

Approach 1: F.N.B Excess Returns Analysis

The Excess Returns model looks at how much profit a company is expected to earn above the return that shareholders require, then capitalizes those “excess” profits into a per share value.

For F.N.B, the starting point is an estimated Book Value of $18.92 per share and a Stable EPS of $1.94 per share, based on future Return on Equity estimates from 5 analysts. The Average Return on Equity used in the model is 9.23%, compared with a Cost of Equity of $1.53 per share. That gap produces an estimated Excess Return of $0.41 per share.

The model also uses a Stable Book Value of $21.01 per share, sourced from future Book Value estimates from 6 analysts. When these excess returns are projected and capitalized, the Excess Returns valuation arrives at an intrinsic value of about $31.52 per share.

Against the recent share price of US$16.86, this implies the stock is about 46.5% undervalued on this measure. This indicates that the market price may not fully reflect the earnings power implied by these assumptions.

Result: UNDERVALUED

Our Excess Returns analysis suggests F.N.B is undervalued by 46.5%. Track this in your watchlist or portfolio, or discover 59 more high quality undervalued stocks.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for F.N.B.

Approach 2: F.N.B Price vs Earnings

For a profitable bank, the P/E ratio is a straightforward way to gauge what investors are currently willing to pay for each dollar of earnings. It lines up well with how you probably think about returns, since it connects the share price directly to the underlying profit.

What counts as a “normal” or “fair” P/E depends on how the market views a company’s growth prospects and risk. Higher expected growth or lower perceived risk can justify a higher multiple, while slower expected growth or higher risk usually points to a lower multiple.

F.N.B currently trades on a P/E of 10.60x. That sits below the Banks industry average of about 11.41x and well below the peer average of 15.86x. Simply Wall St’s Fair Ratio for F.N.B is 13.78x. This Fair Ratio is a proprietary estimate of what the P/E might be given factors such as earnings growth, profit margins, risk profile, industry and market cap, so it can be more tailored than a simple comparison with peers or the sector.

With the actual P/E of 10.60x versus the Fair Ratio of 13.78x, the shares screen as trading below that tailored fair value multiple.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your F.N.B Narrative

Earlier it was mentioned that there is an even better way to understand valuation. Narratives on Simply Wall St give you a simple way to link your view of F.N.B’s story to a set of revenue, earnings and margin forecasts, compare the fair value that drops out of those numbers with today’s share price, and then see that view update automatically as new earnings or news arrive. For example, one investor on the Community page might build a Narrative that leans on the higher analyst price target of US$21.00 with stronger digital platform traction and cost discipline. Another might anchor closer to the lower US$18.00 target with more caution around regional concentration and commercial real estate risk. You can see both side by side and decide which better matches your own expectations.

Do you think there's more to the story for F.N.B? Head over to our Community to see what others are saying!

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

Disclaimer:This article represents the opinion of the author only. It does not represent the opinion of Webull, nor should it be viewed as an indication that Webull either agrees with or confirms the truthfulness or accuracy of the information. It should not be considered as investment advice from Webull or anyone else, nor should it be used as the basis of any investment decision.