Keefe, Bruyette & Woods upgraded its valuation view of Popular, Inc. by raising the firm's price target to $155.00 from $146.00 while keeping an Outperform rating on the regional bank's stock.
The research note from KBW pointed to a combination of stable asset quality and the earnings momentum driven by Popular's operational initiatives as the rationale behind the target increase. The firm also raised its 2027 earnings estimate by 4%, a projection KBW notes sits 1% above the Street consensus that prevailed heading into the quarter.
Market action tracked the upbeat revisions. Popular shares rallied 6% on Tuesday, according to KBW, and at the time of the research update the stock was quoted at $130.60. That level is approximately 1% below its 52-week high of $133.09 and comes after the company delivered a 31% total return over the prior 12 months.
KBW emphasized that asset quality - a closely watched metric for banks - remained steady. The firm also observed that management had downplayed the prospect of active full bank merger-and-acquisition activity, a messaging point that KBW suggested may have been a headwind to the stock's performance in the fourth quarter of 2025.
Operationally, Popular's focus on transformational efforts has been reflected in improved profitability and what KBW describes as another year of positive operating leverage. That combination underpinned KBW's view that "the bar has been reasonably set for another strong year," supporting the decision to keep the Outperform rating even as the price target was lifted.
InvestingPro data referenced in the research note show Popular has increased its dividend for seven consecutive years and presently yields 2.3%.
In corporate results disclosed for the fourth quarter of 2025, Popular reported earnings per share of $3.53, topping analysts' expectations of $3.03. The company did record a slight revenue miss in the same period.
Other broker commentary is consistent with the positive tone. RBC Capital raised its price target on Popular to $141 from $137 and maintained an Outperform rating. RBC highlighted Popular's capital position, noting a common equity tier 1 ratio of 15.7%, which the bank said provides flexibility and room for growth.
Context and implications
- KBW's updated estimates and valuation reflect its view that Popular's operational progress and asset stability support upside to the stock.
- Recent quarterly results show earnings strength, though revenue fell short of consensus.
- Market and broker responses, including target increases from multiple firms, underscore sustained analyst confidence in Popular's balance sheet and execution.