Popular: Solid Q4 2025 Earnings And Undemanding Valuation

2026-01-28 08:03:11 ET

Introduction

Shares in Puerto Rico-focused bank Popular ( BPOP ) are off to a solid start in 2026, boosted by strong Q4 2025 financial results. While the impressive 40.6% Y/Y increase in quarterly EPS was partially the result of a reversal of a FDIC special assessment provision, Popular's underlying performance remains sound. As such, I confirm my previous Buy rating on Popular, with my bullish outlook driven by:

• An undemanding 10.6x trailing P/E multiple for BPOP, representing a circa 20% discount to regional bank peers.
• Positive 2026 outlook, with a circa 11% EPS increase likely to represent a healthy mix between organic growth and share repurchases.
• A strong capital position and low loan to deposit ratio, allowing Popular to remain aggressive on deposit pricing, thus achieving an attractive net interest margin.

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