Regions Financial: Improving Margins, Normalizing Credit Costs, and Discount Valuation Support Buy Rating

Regions Financial, the Financial sector company, was revisited by a Wall Street analyst today. Analyst Keith Horowitz from Citi maintained a Buy rating on the stock and has a $32.00 price target.

Keith Horowitz has given his Buy rating due to a combination of factors that highlight both solid fundamentals and an attractive valuation profile for Regions Financial. He expects net interest margin to continue expanding toward roughly 3.7% by the end of 2026, with net interest income growing in the low- to mid-single digits despite some near‑term headwinds from deposit repricing. At the same time, he anticipates credit costs to normalize to below 50 basis points as the pressure from office‑related commercial real estate charge‑offs subsides, which should help stabilize overall credit quality. Fee income is projected to grow, particularly from the capital markets franchise, supporting positive operating leverage and reinforcing the bank’s earnings power.

Horowitz acknowledges that investor sentiment has been weak amid concerns about late‑cycle credit risk and rising competition in the Southeast, but he believes these worries are more than reflected in the current share price. His forecasts call for Regions to generate returns around 18% and deliver mid‑teens earnings growth in 2026, which he views as strong performance for a bank trading at a discount to peers. While he models a modest near‑term impact from elevated commercial real estate charge‑offs and a slightly slower pace of margin expansion than consensus, he sees these as manageable within the broader context of improving profitability and controlled expenses. Taken together, the risk‑reward profile, expected double‑digit upside, and peer‑leading return outlook support his Buy recommendation on the stock.

In another report released on December 17, KBW also maintained a Buy rating on the stock with a $31.00 price target.