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Despite market run-up, most bank stocks still undervalued

Out of 177 public U.S. banks and thrifts with at least three analyst price-target estimates, 168 were trading below mean price targets as of March 24.

New Orleans-based First NBC Bank Holding Co. had the greatest implied upside at 45.3%, with a $5.67 mean target price against a $3.90 close on March 24. All three analysts, however, had a neutral stance on the stock. The stock's price has plummeted by 81.7% from March 24, 2016.

Despite nearly doubling over the last 12 months, analysts still think that Sioux Falls, S.D.-based Meta Financial Group Inc. has room for growth. They expect the stock to be up another 43.0%. All three analysts in S&P Capital IQ's coverage recommend buying the stock.

San Juan, Puerto Rico-based First Bancorp closed at $5.45 on March 24, with an implied upside of 37.6% from the mean target price of $7.50. Analysts' opinion about the stock is split at the current price, with two analysts recommending to buy the stock, and two others suggesting to hold.

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Of the 201 banks with a minimum of three analyst recommendations, 68 have a "buy" recommendation from at least half of covering analysts. In addition, 14 of these stocks have a unanimous "buy" recommendation. Of those 14, Meta Financial Group Inc., ConnectOne Bancorp Inc. and BofI Holding Inc. had the greatest implied upside as of March 24 at 43.0%, 35.9% and 25.6%, respectively.

Over the last three months, analysts have become significantly more bullish about another bank stock of the 14, Old Line Bancshares Inc. Analysts raised its price target by 20.1%. Even at the March 24 price of $27.84, the stock still has 10% upside.

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