First Bancorp (FBNC) is back on investors’ radar after its latest quarterly report, where revenue and net interest income exceeded analyst expectations and recent board appointments added fresh perspectives to the regional bank’s story.

The stock has been firming up, with a 1-day share price return of 2.11% and a year to date share price return of 16.07%. The 1-year total shareholder return of 45.49% and 3-year total shareholder return of 130.20% point to momentum that remains strong, despite a softer 90-day share price return of 3.04%.

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With FBNC trading at $59.09, about 12% below the average analyst price target and with an estimated intrinsic discount of roughly 40%, the key question is whether this gap signals a genuine opportunity or if the market is already factoring in expectations for future growth.

Price-to-Earnings of 20.3x: Is it justified?

On earnings, First Bancorp trades on a P/E of 20.3x, which sits well above several reference points and suggests the market is paying a premium for each dollar of profit at the current $59.09 share price.

The P/E multiple compares the share price to earnings per share. For banks, it is a quick way to see how much investors are willing to pay for current and expected profitability. When a P/E is high, it often reflects confidence in future earnings, but it can also mean expectations are already built in.

For First Bancorp, that premium is clear. The current P/E of 20.3x is above the estimated fair P/E of 16.3x and also above the US Banks industry average of 11.4x, as well as the peer average of 12.2x. That is a wide gap that could narrow if sentiment cools or if earnings catch up to the price level the market is assigning.

Result: Price-to-Earnings of 20.3x (OVERVALUED)

However, a 20.3x P/E and recent share price strength could leave the stock exposed if earnings growth slows or if broader sentiment toward regional banks weakens.

Another View: What Does The Cash Flow Story Say?

While the P/E of 20.3x makes First Bancorp look expensive, the SWS DCF model tells a different story. With the stock at $59.09 and a future cash flow value estimate of $97.89, it screens as materially undervalued. That kind of gap raises a simple question: which signal do you trust more?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out First Bancorp 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 44 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

Sentiment around First Bancorp is clearly mixed, so it makes sense to check the numbers yourself and decide quickly where you stand. To see what investors are currently optimistic about, take a closer look at the 4 key rewards

Looking for more investment ideas?

If First Bancorp has your attention, do not stop here. Broaden your watchlist with other focused ideas that could fit your risk tolerance and income goals.

• Target potential mispricings by scanning for quality stocks that appear cheap on the numbers through the 44 high quality undervalued stocks
• Strengthen the income side of your portfolio by checking out reliable payers highlighted in the 12 dividend fortresses
• Protect against surprises by focusing on companies flagged for financial resilience using the 74 resilient stocks with low risk scores

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.