Cullen/Frost Bankers (CFR) AI Stock Analysis

• Market Cap: $8.38B
• Dividend Yield: 3.04%
• Average Volume (3M): 481.35K
• Price to Earnings (P/E): 14.0
• Beta (1Y): 0.97
• Revenue Growth: 4.04%
• EPS Growth: 13.30%
• Country: US
• Employees: 5,854
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 2.39
• Shares Outstanding: 64,325,290
• 10 Day Avg. Volume: 444,514
• 30 Day Avg. Volume: 481,350
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.51
• Enterprise Value/Revenue: 4.41
• Enterprise Value/Gross Profit: 6.20
• Enterprise Value/Ebitda: 15.83
• 1Y Price Target: $139.20
• Price Target Upside: 8.63% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 10

• Rating: 75 Outperform
• Price Target: $142.00 ▲(10.82% Upside)

Cullen/Frost Bankers' strong financial performance and positive earnings call are the most significant factors driving the score. The company's profitability and successful expansion strategy outweigh concerns about cash flow and competition. Technical analysis and valuation provide a neutral to slightly positive outlook, contributing to a solid overall score.

Positive Factors

Financial Performance

Cullen/Frost Bankers has shown strong financial performance with EPS beating consensus expectations by 4% due to a wider net interest margin and solid loan growth.

Growth Strategy

Cullen/Frost Bankers is expanding its branch presence in Dallas and Austin, which is expected to significantly contribute to future deposit and loan growth.

Market Position

CFR is well positioned to take market share driven by its branch expansion strategy and strong calling effort.

Negative Factors

Earnings Forecast

The 2025 earnings per share estimate has been lowered due to higher expenses and slower loan growth.

Valuation Concerns

Maintain NEUTRAL solely based on valuation.

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 through several key streams, primarily from net interest income and non-interest income. Net interest income is derived from the interest earned on loans and investments, minus the interest paid on deposits and borrowings. The company offers a variety of loan products, including residential mortgages, commercial real estate loans, and small business loans, which contribute significantly to this income stream. Additionally, non-interest income comes from fees charged for services such as wealth management, treasury management, and transaction services. Strategic partnerships with local businesses and community organizations also enhance its market presence and customer base, further contributing to its overall earnings.

Cullen/Frost Bankers Financial Statement Overview

Summary

Cullen/Frost Bankers shows strong profitability with high profit margins and efficient operations. Despite modest revenue growth, the decline in free cash flow raises concerns. The balance sheet is solid but with limited financial flexibility due to a low equity ratio.

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: Neutral
• Last Price: 128.14
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CFR, the sentiment is Neutral. The current price of 128.14 is above the 20-day moving average (MA) of 126.89, below the 50-day MA of 129.95, and below the 200-day MA of 128.34, indicating a neutral trend. The MACD of 0.37 indicates Negative momentum. The RSI at 49.65 is Neutral, neither overbought nor oversold. The STOCH value of 39.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CFR.

Cullen/Frost Bankers Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ONB	78 Outperform	$8.94B	13.55	8.00%	2.45%	15.94%	-0.47%
BPOP	78 Outperform	$8.47B	12.16	12.73%	2.17%	6.27%	45.08%
CMA	77 Outperform	$8.85B	13.24	11.07%	4.12%	-8.62%	15.37%
CFR	75 Outperform	$8.38B	14.02	15.34%	3.04%	4.04%	13.30%
ZION	74 Outperform	$8.34B	10.31	13.23%	3.08%	2.64%	32.07%
CBSH	72 Outperform	$8.08B	14.62	16.31%	1.79%	13.77%	17.71%
Sector *	68 Neutral	$17.80B	11.87	10.23%	3.74%	9.69%	1.18%

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.