Popular stock closed down 2.8% at US$157.64 after its Q3 2026 report, even though the bank just printed another quarter of solid profitability. Earnings per share came in at US$4.21 and return on tangible common equity landed at 15.8%, levels many regional lenders would be comfortable with.
Short term traders see a red screen. Long term holders see a bank that continues to throw off capital, with US$266 million of quarterly net income and a fresh US$0.90 dividend that sits alongside ongoing buybacks. The real question now is how that capital return story lines up with the current valuation.
If you like that level of earnings power and capital return from Popular but want a broader mix of regional banks with strong balance sheets as a reference point, compare it against our list of solid balance sheet and fundamentals stocks (26 results).
Q3 2026 Earnings Summary
- Total Revenue (Q3 2026 vs. Q3 2025): US$815.995 million vs. US$742.575 million (up about 9.9%)
- Net Income (Excl. Extra Items, Q3 2026 vs. Q3 2025): US$266.334 million vs. US$210.964 million (up about 26.2%)
- Basic EPS (Q3 2026 vs. Q3 2025): US$4.21 vs. US$3.15 (up about 33.8%)
- Net Interest Margin, or NIM (Q3 2026 trailing vs. Q3 2025 trailing): 32.6% net profit margin vs. 27% net profit margin (improved profitability level)
Tired of squinting at earnings tables and scrolling through dense reports? Get a clear visual overview of Popular, including how its valuation compares with its recent profit performance, in the full company report for Popular.
Popular’s Fee And Efficiency Ambitions Under The Microscope
Popular’s bullish story leans heavily on tech spend and cost discipline turning into a sturdier earnings engine rather than just pure loan growth.
"Ongoing investments in digital infrastructure, including Popular’s treasury and cash management platform, Mi Banco marketplace and branch upgrades, are starting to show through in higher debit and credit card fee income and are expected to support further noninterest revenue growth and operating leverage."
Recent noninterest income of US$176m, slightly above guidance and supported by growing card and brokerage fees, backs the idea that digital projects are gaining traction. At the same time, operating expenses rising to US$506m and ROTCE easing to 15.8% show that the promised operating leverage is not yet fully visible.
Puerto Rico Concentration Risk And Credit Costs For Popular
The bear story focuses on how Puerto Rico exposure and single credit hits could chip away at Popular’s resilience even when core trends look healthy.
"The resolution of a large nonperforming commercial relationship through a US$71 million charge off shows that credit losses can increase when single exposures deteriorate, and similar events in future could lift net charge offs, weigh on net interest income and reduce overall profitability."
Net charge offs of US$73m with a higher full year loss outlook of 80% to 90% of loans, plus two borrower specific commercial issues and a higher NPL ratio of 1.16%, show that idiosyncratic credit risk is still very real. Management’s view that issues are contained helps, yet credit costs are clearly running hotter than before.
Not everyone reads the same price the same way. → See the higher figure this Narrative lands on, and how it gets there.
Hunt For Quiet Earnings Power
Popular just reported results that highlight consistent profitability and leave investors assessing possible implications. The real opportunity is identifying stocks that could be undervalued before the market revises their pricing.
- Company 1 - 35% below our estimate - converts a substantial backlog of AI infrastructure and multicloud database contracts into recurring subscription revenue streams.
- Company 2 - 24% below our estimate - meters AI usage across productivity software and cloud infrastructure so enterprise customers align spend on a unified platform.
- Company 3 - 41% below our estimate - scales a device trade in and refurbishment marketplace as policy incentives steer consumers into structured recommerce channels.
Those are three of them. See the full list of 30 companies trading below our fair value estimates →
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