Third-quarter earnings of $1.41 and a higher dividend are real. I model about $6.00 of 2027 earnings at eleven times, a $66 stock, a market-like return from $63 including the dividend.
Key points
- $1.41 third-quarter diluted EPS, up 34% year over year, with FTE net interest margin at 3.19%.
- $6.00 is my 2027 earnings per share, after buybacks and a 3.30%, 3.40% year-end margin.
- 11 times that earnings figure is $66, about 4% above $63.36 plus a 3% dividend.
The call
The $63.36 share needs roughly $5.75 of 2027 earnings at eleven times, the same multiple I use on USB and PNC. That already assumes the fourth-quarter guide of 2.5%, 3% net-interest-income growth and $200 million of buybacks.
I believe earnings can reach about $6.00 as swap drag fades, the Private Bank keeps adding low-cost deposits, and shares fall toward 410 million. Tangible book fell 6.6% this quarter on higher long-term rates, so the multiple stays at eleven, not twelve.
Diluted EPS by quarter, with my forecastsCompany reports through Q3 2026; my estimates thereafter. As of Oct 16, 2026.
Valuation
| Item | Figure |
|---|
| 2026E diluted EPS | $5.35 |
| 2027E diluted EPS | $6.00 |
| Shares, year-end 2027 | ~410 million |
| Multiple on 2027 earnings | 11 times |
| 12-month target | $66 |
| Dividend, last twelve months | $1.84 (2.9% yield) |
Eleven times matches large regionals whose loans are also repricing. Upside is a 16%, 18% return on tangible common equity if the 2027 margin hits the high end of 3.30%, 3.50%; downside is AOCI and office credit keeping the multiple at ten.
Risks
- Deposit costs rise faster than the high-40s beta management cites; watch interest-bearing deposit cost versus the 2.13% third-quarter print.
- Office and multifamily charge-offs climb from 37 basis points; watch nonaccruals versus 0.99% of loans.
- Further rate-driven AOCI hits CET1 on an opt-out-off basis below 8.7% and pauses buybacks.
What would change my mind
Four consecutive quarters of FTE margin at or above 3.30% with CET1 still above 10.5% would support a twelve-times multiple.