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Assessing UMB Financial (UMBF) Valuation After Market Share Gains And Strong Earnings Growth

Simply Wall St · 6d ago

UMB Financial (UMBF) is back in focus after fresh data highlighted strong market share gains, a 17.8% annual rise in net interest income over five years and 20.4% annual earnings per share growth.

See our latest analysis for UMB Financial.

The recent fundamentals story has been met with a firmer share price, with UMB Financial now at $121.43 after a 5.65% 1 month share price return and a 72.74% 5 year total shareholder return. This suggests momentum has been building over time.

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With UMB Financial trading at $121.43 and an analyst price target of $137.69, plus an estimated intrinsic value at roughly double the current price, you have to ask: is this a genuine opportunity, or is future growth already priced in?

Most Popular Narrative: 11.8% Undervalued

With UMB Financial last closing at $121.43 against a narrative fair value of about $137.69, the valuation hinges on ambitious growth and margin assumptions that go well beyond today’s income statement.

The successful integration of the Heartland (HTLF) acquisition, including vendor consolidation and conversion to the UMB platform, is expected to unlock substantial cost savings ($124 million targeted, most of which will be realized by early 2026), which should materially improve operating leverage and expand net margins.

Read the complete narrative.

Curious how those expected cost saves, higher margins, and stronger earnings all link back to that fair value estimate and future P/E assumption? The full narrative lays out the revenue trajectory, profitability shift, and valuation multiple that need to line up to support that price target.

Result: Fair Value of $137.69 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, that fair value story still depends heavily on a smooth integration of Heartland and on cost savings, as well as on credit quality not deteriorating further after higher net charge offs.

Find out about the key risks to this UMB Financial narrative.

Build Your Own UMB Financial Narrative

If you see the story differently, or just want to test your own assumptions against the data, you can build a custom view in minutes with Do it your way.

A great starting point for your UMB Financial research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

Looking for more investment ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data 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 financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.