Is First Merchants (FRME) Pricing Look Attractive After Recent Regional Bank Sector Focus

Simply Wall St.

Feb 01

If you are wondering whether First Merchants at around US$39.76 is a bargain or already priced for perfection, this breakdown is aimed at you. The stock has returned 4.4% over the last week and 6.1% ...

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The stock has returned 4.4% over the last week and 6.1% ...</p>\n\n<a href=\"https://simplywall.st/stocks/us/banks/nasdaq-frme/first-merchants/news/is-first-merchants-frme-pricing-look-attractive-after-recent-1\">Source Link</a>\n\n</div>\n","source":"simplywall_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Is First Merchants (FRME) Pricing Look Attractive After Recent Regional Bank Sector Focus</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nIs First Merchants (FRME) Pricing Look Attractive After Recent Regional Bank Sector Focus\n</h2>\n\n<h4 class=\"meta\">\n\n\n2026-02-01 01:24 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://simplywall.st/stocks/us/banks/nasdaq-frme/first-merchants/news/is-first-merchants-frme-pricing-look-attractive-after-recent-1><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>If you are wondering whether First Merchants at around US$39.76 is a bargain or already priced for perfection, this breakdown is aimed at you. The stock has returned 4.4% over the last week and 6.1% ...</p>\n\n<a href=\"https://simplywall.st/stocks/us/banks/nasdaq-frme/first-merchants/news/is-first-merchants-frme-pricing-look-attractive-after-recent-1\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4211","symbol_name":"区域性银行","start_time":0,"source_url":"https://simplywall.st/stocks/us/banks/nasdaq-frme/first-merchants/news/is-first-merchants-frme-pricing-look-attractive-after-recent-1","article_id":"2608441070","we_media_id":null,"thumbnails":["https://images.simplywall.st/asset/industry/7013000-choice1-main-header/1585186561056"],"rights":{"source":"simplywall_highlight","url":"https://simplywall.st/stocks/us/banks/nasdaq-frme/first-merchants/news/is-first-merchants-frme-pricing-look-attractive-after-recent-1","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2608441070","pubTimestamp":1769880298,"columns":[],"sourceInfo":{"source_id":"simplywall_highlight","name":"Simply Wall St."},"weMediaInfo":null,"summary":"If you are wondering whether First Merchants at around US$39.76 is a bargain or already priced for perfection, this breakdown is aimed at you.\nThe stock has returned 4.4% over the last week and 6.1% over the last month, while the 1 year return sits at a 7.2% decline and the 5 year return is 16.3%.\nRecent market attention on regional banks and their balance sheet strength has kept names like First Merchants in focus, particularly among investors comparing financial health and profitability...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4211":"区域性银行","FRME":"第一招商股份"},"translate_title":"在最近区域银行业的关注之后，First Merchants(FRME)的定价看起来很有吸引力","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"FRME":1.5},"content_text":"If you are wondering whether First Merchants at around US$39.76 is a bargain or already priced for perfection, this breakdown is aimed at you. The stock has returned 4.4% over the last week and 6.1% over the last month, while the 1 year return sits at a 7.2% decline and the 5 year return is 16.3%. Recent market attention on regional banks and their balance sheet strength has kept names like First Merchants in focus, particularly among investors comparing financial health and profitability across peers. Broader sector news around credit quality, capital levels, and regulation has formed an important backdrop for the share price moves seen in recent weeks. On our valuation checklist, First Merchants scores 5 out of 6 for being undervalued. Next, we will walk through the main valuation approaches behind that score, then finish with a framework that can help you interpret these numbers more effectively.  Find out why First Merchants's -7.2% return over the last year is lagging behind its peers. AdvertisementApproach 1: First Merchants Excess Returns Analysis The Excess Returns model looks at how much profit a company can generate over and above the return that shareholders require, then capitalises those “extra” profits into an intrinsic value per share. For First Merchants, the starting point is book value of $42.87 per share and a stable book value estimate of $46.58 per share, based on weighted future book value estimates from 5 analysts. The model uses a stable EPS estimate of $4.51 per share, sourced from weighted future return on equity estimates from the same analyst set. The required return for shareholders is captured by a cost of equity of $3.29 per share. After covering that, the company is estimated to earn an excess return of $1.22 per share. This is supported by an average return on equity of 9.69%, which the model treats as sustainable over time. When these excess returns are projected and discounted, the Excess Returns model estimates an intrinsic value of about $78.69 per share. Compared with the current share price around $39.76, this points to the stock being 49.5% undervalued on this approach. Result: UNDERVALUED Our Excess Returns analysis suggests First Merchants is undervalued by 49.5%. Track this in your watchlist or portfolio, or discover 868 more undervalued stocks based on cash flows. FRME Discounted Cash Flow as at Jan 2026 Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for First Merchants. Approach 2: First Merchants Price vs Earnings The preferred multiple here is the P/E ratio, which is a common way to value consistently profitable companies because it ties the share price directly to the earnings that belong to shareholders. For a bank like First Merchants, earnings are a central reference point for how the market views its profitability and capital allocation. What counts as a “normal” or “fair” P/E often reflects what investors are willing to pay for each dollar of earnings given their expectations for future growth and the risks they see in the business. Higher expected growth or lower perceived risk can support a higher multiple, while lower growth or higher risk usually points to a lower one. First Merchants currently trades on a P/E of 10.10x, compared with an average of 11.84x for Banks and 13.10x across peers. Simply Wall St’s Fair Ratio for First Merchants is 12.61x, which is its proprietary estimate of what the P/E “should” be after factoring in things like earnings growth, profit margins, risk profile, industry, and market cap. Because this Fair Ratio is tailored to the company rather than a broad group, it can give a more targeted anchor than simple industry or peer comparisons. With the Fair Ratio of 12.61x above the current 10.10x, the P/E based view suggests the shares may be trading below this metric-based reference point. Result: POTENTIALLY UNDERVALUED ON THIS METRIC NasdaqGS:FRME P/E Ratio as at Jan 2026 P/E ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1417 companies where insiders are betting big on explosive growth. Upgrade Your Decision Making: Choose your First Merchants Narrative Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which give you a simple story behind the numbers like your fair value, and your expectations for First Merchants’ revenue, earnings and margins. A Narrative links what you believe about a company, for example how its business develops or how its profitability might change, to a financial forecast and then to a fair value that you can compare directly with the current share price. On Simply Wall St, Narratives are available on the Community page and are used by millions of investors as an easy tool to frame decisions, because they show at a glance whether your assumed fair value is above or below today’s price and they refresh automatically when new information like earnings or news comes through. For example, one First Merchants Narrative on the Community page might assume a relatively high fair value based on stronger revenue and margin assumptions, while another could set a lower fair value using more cautious estimates for the same metrics. Do you think there's more to the story for First Merchants? Head over to our Community to see what others are saying! NasdaqGS:FRME 1-Year Stock Price Chart  This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.New: AI Stock Screener & AlertsOur new AI Stock Screener scans the market every day to uncover opportunities.• Dividend Powerhouses (3%+ Yield)• Undervalued Small Caps with Insider Buying• High growth Tech and AI CompaniesOr build your own from over 50 metrics.Explore Now for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0,"need_auth":false,"code":"91000000","status":"200"}}}