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Is WaFd (WAFD) Undervalued Following Strong Earnings And Rising Credit Costs?

Simply Wall St · 3d ago

WaFd (WAFD) just delivered its fourth quarter and full year 2026 results, pairing higher net interest income with a sharp jump in net charge offs and fresh commentary on the pending EverBank merger.

WaFd shares closed at US$29.15 on 16 October, with the stock falling 10% on a 30 day share price return and 20.87% over 90 days. However, the 1 year total shareholder return is up 7.21% and the 3 year total shareholder return is 31.76%, indicating that recent momentum has faded despite longer term holders still being ahead overall.

Spot emerging banking stories that echo WaFd's mix of earnings strength and credit risk shifts by scanning our hand picked 33 high quality undervalued stocks.

WaFd is producing higher earnings and carrying heavier credit costs, yet the share price has slipped in recent months. Is this a strong regional bank temporarily marked down, or is it already fairly priced for the risks on display?

Most Popular Narrative: 16% Undervalued

On the most followed valuation view, WaFd screens below its inferred fair value of $34.50, compared with the recent $29.15 close. This puts the focus firmly on how future earnings power and merger execution could close that gap.

The Build 2030 shift toward true commercial banking and small business relationships, including reorganized business, corporate and commercial real estate banking teams, positions WaFd to grow higher yielding C&I and CRE loans, supporting faster revenue and earnings growth.

Ongoing runoff of low yielding single family mortgage loans and redeployment into higher yielding agency mortgage backed securities with no credit risk should structurally lift asset yields and net interest margin over time, improving net income.

See why 6 investors see WaFd as 16% undervalued.

Result: Fair Value of $34.50 (UNDERVALUED)

Still, the WaFd narrative could be knocked off course if credit costs climb faster than expected or if the EverBank merger integration proves more disruptive than planned.

Find out about the key risks to this WaFd narrative.

Next Steps

WaFd clearly sparks mixed reactions, with value upside on one side and credit and merger questions on the other, so move fast and test the story against the numbers yourself. To see what optimistic investors are focusing on, start by checking the 5 key rewards.

Looking for more ideas beyond WaFd?

Do not stop with a single banking story when a wider watchlist of potential opportunities can help you stress test your thinking and sharpen your next move.

  • Target potential mispricings by scanning our hand picked 33 high quality undervalued stocks that line up strong fundamentals with restrained expectations.
  • Strengthen your income playbook by checking out a focused group of higher yielding candidates through the 8 dividend fortresses that meet strict payout and coverage filters.
  • Protect your downside by reviewing the 32 resilient stocks with low risk scores which highlights resilient businesses with lower risk scores and sturdier financial profiles.

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.