Earnings event puts fresh focus on International Bancshares stock

International Bancshares (IBOC) released first quarter 2026 results, reporting higher net interest income, net income and earnings per share compared with a year earlier. The update gives investors fresh numbers to assess the stock.

The earnings release comes after a period of mixed momentum, with a 7.37% 1 month share price return and a small 1.77% 3 month share price decline, while the 1 year total shareholder return of 17.87% and 3 year total shareholder return of 91.82% point to stronger performance over a longer horizon.

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With the stock up strongly over 1 and 3 years and trading below the average analyst price target and some intrinsic value estimates, you need to ask whether International Bancshares is still undervalued or if the market already prices in future growth.

Price-to-Earnings of 11x: Is it justified?

On a P/E of 11x at a last close of $73.26, International Bancshares screens as inexpensive against both the broader peer group and the US banks industry average. This suggests the stock is priced below many comparable banks based on current earnings alone.

The P/E ratio links the share price to earnings per share. A lower P/E can suggest the market is assigning a lower price to each dollar of profit. For a bank that reports high quality earnings and a net income of $412.3m on revenue of $827.1m, the P/E is a simple way to see how much investors are currently willing to pay for those profits.

Compared with a peer average P/E of 21.9x, International Bancshares trades at roughly half the level, which represents a strong discount. Against the US banks industry average P/E of 11.5x, the stock sits slightly lower, which points to a modestly cheaper valuation than the sector overall. The estimated fair P/E is also 11x, which is effectively in line with where the stock trades, indicating the market multiple is close to the level that regression analysis suggests it could gravitate toward.

Result: Price-to-Earnings of 11x (UNDERVALUED)

However, you also need to watch for risks such as changes in credit conditions that affect loan demand or shifts in deposit costs that pressure profitability.

Another view from the SWS DCF model

The P/E story suggests International Bancshares is only modestly cheap, but the SWS DCF model paints a stronger picture. With an estimated fair value of $143.11 per share versus a $73.26 price, the stock screens as heavily undervalued on future cash flows. Which lens do you trust more?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out International 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

If this mix of signals leaves you torn between caution and optimism, act while the data is fresh and weigh it up yourself using the 3 key rewards.

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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.