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First Republic Bank: Rosy Earnings Outlook, But Overvalued

Apr. 06, 2021 7:24 AM ETFirst Republic Bank (FRCB) Stock1 Comment
Sheen Bay Research profile picture
Sheen Bay Research


  • Loans will likely continue to grow. However, an increase in home prices and gradually increasing mortgage rates present threats to the growth.
  • The provision expense will likely decline because of the high level of existing allowances and manageable credit risk.
  • The year-end target price suggests a substantial downside from the current market price.
First Republic Bank
Photo by tttuna/iStock Unreleased via Getty Images

Earnings of First Republic Bank (FRC) are likely to jump this year on the back of strong loan growth. The company’s loan portfolio has benefited from the Millennial strategy targeting first-time homebuyers in suburban markets. The strong growth momentum from this targeted strategy will

This article was written by

Sheen Bay Research profile picture
Around 10 years of experience covering Banks and Macroeconomics. Passionate about discovering lucrative investments and generating alpha.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (1)

Herbert 5223 profile picture
Solid analysis. I was looking for confirmation that FRC is overvalued and your analysis certainly exposes that. This suggests a new investor wait for a price decline to your target prices before starting a long position.
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