Assessing TriCo Bancshares (TCBK) Valuation After Recent Share Price Move

TriCo Bancshares (TCBK) is back on investor radars after its recent share price move, with the stock now trading around $49.22. That puts current performance and valuation metrics into sharper focus for bank focused portfolios.

See our latest analysis for TriCo Bancshares.

While the latest move to around $49.22 comes after a 0.35% 1 day share price gain, the 7 day share price return of 3.51% and 30 day share price return of 1.52% point to cooling short term momentum. At the same time, the 1 year total shareholder return of 16.35% and 5 year total shareholder return of 27.79% present a more constructive longer term picture.

If this price action has you thinking about what else might be setting up for the next leg higher, it could be a good time to broaden your search with 22 top founder-led companies.

With TriCo Bancshares trading around $49.22 and showing an estimated 36.20% intrinsic discount alongside a 13.37% gap to analyst targets, the key question is whether this is a genuine value opportunity or if the market already reflects future growth.

Price-to-Earnings of 13.2x: Is it justified?

TriCo Bancshares currently trades on a P/E of 13.2x, which leaves the stock looking a bit expensive compared with some benchmarks even with the recent share price at $49.22.

The P/E ratio compares the current share price to the company’s earnings per share. It is a common way investors gauge how much they are paying for each dollar of earnings in the banking sector. For a bank like TriCo Bancshares, with earnings forecast to grow 5.9% per year and a Return on Equity of 9.2% that is considered low, this multiple raises questions about how much earnings growth is already reflected in the price.

Against the wider US Banks industry, TriCo Bancshares trades richer than the 11.6x industry average. It also sits above the estimated fair P/E of 11.3x that our model suggests the market could move towards over time. At the same time, the stock is on a slightly lower P/E than its direct peer group average of 13.8x, which points to investors paying a full, but not extreme, price for current earnings.

Explore the SWS fair ratio for TriCo Bancshares

Result: Price-to-Earnings of 13.2x (OVERVALUED)

However, you also need to weigh risks such as pressure on loan demand in its core markets and any deterioration in credit quality that could affect earnings resilience.

Find out about the key risks to this TriCo Bancshares narrative.

Another View: DCF Points to a Very Different Price

While the P/E of 13.2x suggests TriCo Bancshares might be priced on the rich side, our DCF model points the other way. With the shares at $49.22 versus an estimated future cash flow value of $77.15, the model views the stock as materially undervalued.

That gap highlights how different methods can tell different stories. Which one do you consider more useful for your own process: earnings today or cash flows over time

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out TriCo Bancshares for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 51 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

Given the mixed signals so far, it makes sense to look under the hood yourself and decide how you feel about TriCo Bancshares. To round out your view and see what the market is optimistic about, take a closer look at the 4 key rewards.

Looking for more investment ideas?

If you are weighing up what to do next after looking at TriCo Bancshares, do not stop here. Widen your watchlist with ideas other investors might miss.

• Target steadier potential by reviewing companies screened for income strength through 16 dividend fortresses that could support more reliable cash flows from distributions.
• Hunt for value by scanning 51 high quality undervalued stocks where solid fundamentals and pricing gaps may offer a more attractive entry point for patient investors.
• Prioritise resilience by focusing on 78 resilient stocks with low risk scores which highlights businesses with lower overall risk scores that might help balance out the rest of your portfolio.

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.

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