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3 Reasons to Invest in First Interstate BancSystem (FIBK) Stock

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It seems to be the perfect time to invest in bank stocks. Supported by interest rate hikes and decent growth in loan balances, banks are expected to witness improvements in their top lines. Therefore, we bring one such stock — First Interstate BancSystem, Inc. (FIBK - Free Report) — which is a solid pick based on its fundamental strength and improving prospects.

The company has been witnessing upward earnings estimate revisions of late, reflecting that analysts are optimistic regarding its earnings growth prospects. Over the past 60 days, the Zacks Consensus Estimate for FIBK’s current-year earnings has moved 11.7% upward. As a result, the company currently carries a Zacks Rank #2 (Buy).

Over the past three months, shares of the company have gained 15.2%, outperforming the industry’s rise of 11.6%.

 

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Image Source: Zacks Investment Research

 

Some other factors are mentioned below, which make FIBK stock an attractive investment option now.

Earnings Strength: First Interstate BancSystem witnessed earnings per share growth of 3.4% in the last three to five years. The upward momentum is expected to continue in the near term. The company’s earnings are projected to grow 4.2% and 22% in 2022 and 2023, respectively.

First Interstate BancSystem has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters.

Revenue Growth: First Interstate BancSystem’s revenues have seen a compound annual growth rate of 6.8% over the last five years (2017-2021). The upward momentum continued in the first half of 2022.

Driven by higher rates and loan growth, the company’s top line is expected to improve further. Its projected sales growth rates of 74.7% and 10.6% for 2022 and 2023, respectively, ensure the continuation of the upward revenue trend.

Strong Leverage: The company currently has a debt/equity ratio of 0.09, below the industry average of 0.31. This shows that FIBK will be more financially stable than its peers in adverse economic conditions.

Other Stocks Worth Considering

A couple of other top-ranked stocks from the same space are Associated Banc-Corp (ASB - Free Report) and German American Bancorp, Inc. (GABC - Free Report) .

Associated Banc-Corp’s earnings estimates have moved 10.6% upward over the past 60 days. Its share price has risen 14.1% in the past three months. ASB currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

German American Bancorp’s earnings estimates for 2022 have been revised 7.6% upward over the past 60 days. Its share price has increased 5.3% in the past three months. GABC carries a Zacks Rank #2 at present.


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First Interstate BancSystem, Inc. (FIBK) - free report >>

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