Triumph Financial most-expensive US bank stock for 3rd consecutive month

Triumph Financial Inc. had the highest price-to-estimated 2023 earnings per share multiple among US bank stocks for the third-straight month, according to an S&P Global Market Intelligence analysis.

S&P Global Market Intelligence analyzed US banks that appear to be valued more as a multiple of earnings than tangible book value. To be included in this analysis, a company needs to have normalized EPS estimates from at least four analysts available for calendar year 2023. In addition, the bottom 20% of banks by price to tangible book were excluded.

Most richly valued banks

Triumph Financial traded at 26.1x its estimated 2023 EPS as of April 11, far above the industry median of 8.4x for the 122 banks in the analysis. The estimated 2023 earnings for Triumph Financial would represent a 45.7% decrease from the company's actual full-year 2022 EPS.

Raymond James analyst Michael Rose on April 6 downgraded the bank's shares to "market perform" from "outperform," reflecting an earnings estimate reduction that was mostly driven by continued moderation in the trucking market. The analyst also cut his full-year 2023 EPS estimate for Triumph Financial to $1.90 from $2.05.

Dallas-based Hilltop Holdings Inc. was the second-most richly valued bank stock with a multiple of 19.9x. Abilene, Texas-based First Financial Bankshares Inc. was third with its stock trading at 19.2x its estimated EPS.

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Charleston, W.Va.-based City Holding Co. stood in the No. 13 spot with a price-to-estimated EPS multiple of 12.6x. Piper Sandler analyst Casey Orr Whitman on April 6 resumed coverage of the company with a rating of "neutral" and a 2023 EPS estimate of $6.89.

City Holding's stock will be aided by the company's "strong retail deposit base, clean credit quality track record, and healthy capital base," the analyst said.

Total returns

Despite its rich valuation, Triumph Financial was among the best-performing US bank stocks by total return for March, as was Louisville, Ky.-based Stock Yards Bancorp Inc., which had a price-to-estimated EPS multiple of 14.3x as of April 11.

In the last 12 months, the S&P US BMI Banks index returned a negative 20.5%, and the S&P 500 returned a negative 5.3%. Despite its strong performance thus far in 2023, Triumph Financial shares had posted a negative 26.7% return over the last 12 months. Its year-to-date return in 2023 stood at positive 15.0%.

First Financial Bankshares Inc. stock also had a negative 26.7% return over the last 12 months. Hilltop Holdings, the second-most richly valued bank stock in the last month, has recorded a positive 2.9% return for the last 12 months.