Cullen/Frost Bankers (CFR) AI Stock Analysis

• Market Cap: $8.52B
• Dividend Yield: 3.11%
• Average Volume (3M): 319.71K
• Price to Earnings (P/E): 14.6
• Beta (1Y): 0.94
• Revenue Growth: 5.99%
• EPS Growth: 7.75%
• Country: US
• Employees: 5,854
• Sector: Financial
• Sector Strength: 79
• Industry: Banks - Regional
• EPS (TTM): 2.30
• Shares Outstanding: 64,287,940
• 10 Day Avg. Volume: 319,138
• 30 Day Avg. Volume: 319,711
• PEG Ratio: 4.95
• Price to Book (P/B): 1.95
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 107.57
• Enterprise Value/Market Cap: 0.57
• Enterprise Value/Revenue: 0.43
• Enterprise Value/Gross Profit: 2.39
• Enterprise Value/Ebitda: 1.62
• 1Y Price Target: $130.18
• Price Target Upside: -1.76% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 11

• Rating: 78 Outperform
• Price Target: $144.00 ▲(8.67%Upside)

Cullen/Frost Bankers receives a strong score driven primarily by its robust financial performance and positive earnings call insights, which highlight growth and effective expansion strategies. Technical analysis and valuation contribute moderately, reflecting a stable trading outlook and fair valuation.

Positive Factors

Branch Expansion

Cullen/Frost Bankers is expanding its branch network in major Texas cities like Dallas and Austin, which is expected to enhance deposit and loan growth.

Earnings Beat

Cullen/Frost Bankers reported first-quarter results with earnings per share beating expectations, mainly due to a wider net interest margin and lower credit loss provisioning.

Stock Performance

Despite the lower earnings estimate, the stock is expected to have an 18% price appreciation and a 3.3% dividend yield, leading to an estimated 12-month total return of about 21%.

Negative Factors

2025 Guidance

New 2025 guidance seems conservative with net interest income projected to increase modestly, assuming loan growth to moderate and regulators imposing restrictions on overdraft and interchange fees.

Expense Guidance

Expense guidance remains elevated as the management team focuses on creating long-term shareholder value, with major investments to replace legacy systems and enhance the digital experience continuing in 2026.

Cullen/Frost Bankers Business Overview & Revenue Model

Company Description

Cullen/Frost Bankers, Inc. operates as the bank holding company for Frost Bank that offers commercial and consumer banking services in Texas. It operates in two segments, Banking and Frost Wealth Advisors. The company offers commercial banking services to corporations and other business clients, including financing for industrial and commercial properties, interim construction related to industrial and commercial properties, equipment, inventories and accounts receivables, and acquisitions; commercial leasing; and treasury management services. It also provides consumer banking services, such as checking accounts, savings programs, automated-teller machines (ATMs), overdraft facilities, installment and real estate loans, home equity loans and lines of credit, drive-in and night deposit services, safe deposit facilities, and brokerage services. In addition, the company offers international banking services comprising deposits, loans, letters of credit, foreign collections, funds, and foreign exchange services. Further, it acts as a correspondent for approximately 171 financial institutions; offers trust, investment, agency, and custodial services for individual and corporate clients; provides capital market services that include sales and trading, new issue underwriting, money market trading, advisory, and securities safekeeping and clearance; and supports international business activities. Additionally, the company offers insurance and securities brokerage services; and holds securities for investment purposes, as well as investment management services to Frost-managed mutual funds, institutions, and individuals. It operates approximately 157 financial centers and 1,650 ATMs. The company serves energy, manufacturing, services, construction, retail, telecommunications, healthcare, military, and transportation industries. Cullen/Frost Bankers, Inc. was founded in 1868 and is headquartered in San Antonio, Texas.

How the Company Makes Money

Cullen/Frost Bankers generates revenue primarily through the traditional banking model, which includes interest income from loans and leases, as well as fees and commissions from various banking services. The company earns interest income by lending money to individuals and businesses, with interest rates providing a significant portion of its income. Non-interest income is derived from service charges on deposit accounts, trust and investment management fees, and insurance commissions. Additionally, Cullen/Frost Bankers benefits from its wealth management and brokerage services, which offer investment advisory and financial planning services. The company also engages in strategic partnerships and maintains a strong regional focus that helps bolster its market presence in Texas. The combination of these revenue streams and a focus on customer-centric services contribute to its overall earnings.

Cullen/Frost Bankers Financial Statement Overview

Summary

Cullen/Frost Bankers shows strong profitability with robust net profit and EBIT margins. However, the decline in free cash flow and modest revenue growth indicate potential challenges in cash generation and limited expansion. The solid leverage profile with an effective ROE is offset by the low equity ratio, suggesting restricted financial flexibility.

Income Statement

Cullen/Frost Bankers demonstrates strong profitability with a gross profit margin of 71.19% and a net profit margin of 20.88% for TTM (Trailing-Twelve-Months). Revenue growth rate is modest at 0.43%, indicating stability but limited expansion. The company maintains healthy EBIT (24.92%) and EBITDA margins (27.88%), showcasing efficient operations.

Balance Sheet

The balance sheet reveals a solid equity ratio of 7.91%, indicating a conservative leverage profile with a debt-to-equity ratio of 1.15. Return on Equity (ROE) is robust at 14.53%, reflecting effective use of equity to generate returns. However, the relatively low equity ratio may suggest limited financial flexibility.

Cash Flow

Cash flow analysis shows a significant decline in free cash flow growth, down by 91.36%, which raises concerns about cash generation. However, the company maintains a strong operating cash flow to net income ratio of 0.34 and a free cash flow to net income ratio of 0.12, indicating adequate cash flow management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.86B	2.85B	2.65B	1.88B	1.40B	1.49B
Gross Profit	2.04B	2.00B	1.94B	1.69B	1.37B	1.20B
EBITDA	797.98M	778.78M	788.82M	740.17M	558.83M	415.69M
Net Income	597.77M	582.54M	597.97M	579.15M	443.08M	331.15M
Balance Sheet
Total Assets	52.00B	52.52B	50.85B	52.89B	50.88B	42.39B
Cash, Cash Equivalents and Short-Term Investments	9.25B	25.26B	25.18B	30.06B	30.47B	20.73B
Total Debt	4.72B	4.59B	4.36B	4.93B	2.99B	2.35B
Total Liabilities	47.89B	48.62B	47.13B	49.76B	46.44B	38.10B
Stockholders Equity	4.11B	3.90B	3.72B	3.14B	4.44B	4.29B
Cash Flow
Free Cash Flow	74.44M	861.76M	320.21M	620.08M	582.44M	428.82M
Operating Cash Flow	204.99M	989.53M	478.85M	722.58M	648.29M	524.24M
Investing Cash Flow	-2.62B	-180.88M	-942.75M	-8.28B	-2.53B	-1.63B
Financing Cash Flow	1.80B	738.33M	-2.88B	3.00B	8.17B	7.61B

Cullen/Frost Bankers Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 132.51
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CFR, the sentiment is Positive. The current price of 132.51 is above the 20-day moving average (MA) of 126.65, above the 50-day MA of 124.23, and above the 200-day MA of 126.36, indicating a bullish trend. The MACD of 0.72 indicates Negative momentum. The RSI at 57.91 is Neutral, neither overbought nor oversold. The STOCH value of 86.51 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CFR.

Cullen/Frost Bankers Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WTFC	82 Outperform	$8.55B	12.63	11.58%	1.61%	7.10%	4.65%
WBS	79 Outperform	$9.56B	12.79	8.59%	2.93%	2.69%	-9.07%
CFR	78 Outperform	$8.52B	14.55	15.26%	3.11%	5.99%	7.75%
CMA	75 Outperform	$7.81B	11.27	11.11%	4.76%	-9.81%	5.22%
PNFP	75 Outperform	$8.86B	18.47	7.77%	0.87%	8.08%	-11.31%
WAL	74 Outperform	$8.57B	10.67	12.36%	1.96%	11.01%	6.63%
Sector *	73 Outperform	€27.71B	11.13	17.20%	4.00%	9.17%	28.21%

Cullen/Frost Bankers Corporate Events

Cullen/Frost Bankers Highlights Strong Market Leadership

On December 31, 2024, Cullen/Frost Bankers released an investor presentation highlighting its financial performance and strategic positioning. The company has maintained strong market leadership in Texas, receiving top satisfaction rankings and numerous awards. Their technological advancements include a highly-rated mobile app and increased digital transactions. The presentation underscores the company’s resilience and commitment to growth in a competitive industry, which is significant for stakeholders given the robust Texas market and Cullen/Frost’s significant presence and influence.