Entering text into the input field will update the search result below

Popular, Inc.: Provision Reversals To Boost Earnings

May 01, 2021 9:18 AM ETPopular, Inc. (BPOP)1 Comment
Sheen Bay Research profile picture
Sheen Bay Research


  • The provision expense will likely remain subdued in the year ahead because allowances currently appear excessive. Further, Puerto Rico's economy has considerably improved.
  • The federal stimulus will likely boost deposits, which in turn will likely drive earnings growth in the remainder of the year.
  • A shift in the asset mix towards lower-yielding assets will likely pressurize the net interest margin.
  • The December 2021 target price suggests a downside from the current market price. Further, Popular Inc. is offering a low dividend yield.

Banco Popular-Ponce, Puerto Rico
Photo by demerzel21/iStock via Getty Images

Earnings of Popular Inc. (NASDAQ:BPOP) will likely surge this year mostly on the back of net reversals of provisions for loan losses. Further, the stimulus-driven deposit growth will likely boost earning asset growth in the

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.

Disclaimer: This article is not financial advice. Investors are expected to consider their investment objectives and constraints before investing in the stock(s) mentioned in the article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (1)

Atlanta investor profile picture
Lots of money is flowing into Puerto Rico from hurricane rebuilding money that is only now being released. The economy seems to be picking up as Puerto Rico provides a popular option for travel for Americans at a time Covid makes international travel not so attractive. BPOP is a play on the long term outlook for the region. There will be lots of opportunities over time even if lending is not strong now, which is essentially the case for most U.S. banks. The valuation of banks has improved with a stronger U.S. outlook and rise in rates and a lot will depend on whether that is sustainable.
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.