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Wintrust Financial (WTFC) is back on investor radars after recent share price moves, with the stock closing at $152.18 and posting mixed short term returns over the week and month.
See our latest analysis for Wintrust Financial.
Beyond the latest move, Wintrust Financial’s share price has a 90 day return of 13.55% and a year to date return of 6.67%, while its 1 year total shareholder return stands at 25.89%, pointing to momentum that has been building over time rather than fading.
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So with Wintrust delivering a 25.89% 1 year total return, trading at $152.18 and flagged with an intrinsic discount of about 42%, is there still underappreciated value here, or is the market already pricing in future growth?
Right now, Wintrust Financial trades on a P/E of 13.2x, which sits a touch above both its US banks peer average of 13x and the broader US banks industry at 11.7x.
The P/E ratio compares the current share price to earnings per share, so you are effectively seeing how many dollars the market is willing to pay for each dollar of current earnings. For a bank like Wintrust, this is a common shorthand for how the market views its earnings profile compared with other lenders.
Here, the picture is mixed. On one hand, the stock is described as good value relative to an estimated fair P/E of 13.6x, suggesting room for the market to shift closer to that level. On the other hand, the shares are described as expensive versus both direct peers at 13x and the US banks industry at 11.7x, which implies investors are already accepting a premium multiple for Wintrust’s earnings.
That premium becomes clearer when you line it up directly against the sector. The market is paying more per dollar of earnings for Wintrust than for the average US bank, even though its expected revenue and earnings growth are described as slower than both the US market and the 20% threshold used for high growth. Any future move in sentiment could see that 13.2x multiple drift closer to the estimated fair P/E of 13.6x, or toward the lower industry average, depending on how investors reassess the earnings profile.
Explore the SWS fair ratio for Wintrust Financial
Result: Price-to-Earnings of 13.2x (ABOUT RIGHT)
However, that story can change if the 42% intrinsic discount proves too optimistic, or if slower revenue and earnings growth make the current premium P/E look stretched.
