• Investors may be wondering if First Citizens BancShares at around US$1,928 a share is still offering value, or if most of the opportunity has already been priced in.
• The stock is up 0.4% over the last week, but down 5.0% over the past month and down 10.7% year to date. The 3 year and 5 year returns sit at 49.2% and 131.7% respectively, which may have shifted how investors view both its growth potential and risk.
• Recent coverage has focused on First Citizens BancShares as a US regional bank stock, with attention on how its share price performance compares with peers and broad bank sector trends. This context helps frame whether the recent 0.1% decline over the past year is viewed as a pause after strong multi year gains or as a sign of changing sentiment.
• On Simply Wall St's 6 point valuation checklist, First Citizens BancShares scores 5 out of 6. A logical next step is a closer look at how different valuation methods stack up for this stock and why a more holistic framework later in the article can be even more useful than any single model.

Approach 1: First Citizens BancShares Excess Returns Analysis

The Excess Returns model looks at how much profit a company is expected to generate above the return that shareholders require, then capitalizes those extra profits into an intrinsic value per share.

For First Citizens BancShares, the analysis starts with a Book Value of US$1,735.17 per share and a Stable Book Value estimate of US$1,981.92 per share, based on weighted future book value estimates from 7 analysts. Stable EPS is estimated at US$206.14 per share, sourced from weighted future Return on Equity forecasts, and the average Return on Equity used in the model is 10.40%.

The Cost of Equity is set at US$166.05 per share, which implies an Excess Return of US$40.08 per share. In simple terms, the model assumes the bank can earn more on its equity base than investors require, and that gap is what supports a higher intrinsic value over time.

Putting these inputs together, the Excess Returns valuation produces an intrinsic value estimate of about US$2,810.37 per share, which implies the stock is 31.4% undervalued relative to the recent price around US$1,928.

Result: UNDERVALUED

Our Excess Returns analysis suggests First Citizens BancShares is undervalued by 31.4%. Track this in your watchlist or portfolio, or discover 51 more high quality undervalued stocks.

Approach 2: First Citizens BancShares Price vs Earnings

The P/E ratio is a common way to value profitable companies because it links what you pay for the stock directly to the earnings the business is generating. It helps you see how many dollars investors are currently willing to pay for each dollar of earnings.

What counts as a "normal" or "fair" P/E depends on how markets see a company's growth prospects and risk. Higher expected growth or lower perceived risk can justify a higher P/E, while slower expected growth or higher risk usually line up with a lower P/E.

First Citizens BancShares is trading on a P/E of 10.21x. That sits close to the Banks industry average of 11.13x and below the peer average of 16.10x. Simply Wall St also calculates a Fair Ratio of 12.24x, which is the P/E that would typically be expected given factors such as the company's earnings profile, industry, profit margins, market cap and identified risks.

This Fair Ratio can be more informative than a simple comparison with peers or the industry, because it aims to adjust for those company specific characteristics rather than assuming one size fits all multiples. Since the Fair Ratio of 12.24x is higher than the current 10.21x, the stock screens as undervalued on this measure.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your First Citizens BancShares Narrative

Earlier it was mentioned that there is an even better way to understand valuation, so Narratives bring your view of First Citizens BancShares together into one clear story that links what you think about its business, future revenue, earnings and margins to a financial forecast and a fair value, then compares that fair value with the current share price to help you decide whether it looks attractive or not.

On Simply Wall St's Community page, millions of investors can use Narratives as a straightforward tool where you set assumptions instead of relying only on preset models. The platform then keeps your view updated when new earnings, news or analyst targets come through.

For example, one investor might build a Narrative that lines up with the higher analyst target of US$2,500 per share for First Citizens BancShares, based on confidence in factors such as deposit growth, share repurchases and margin resilience. Another investor might anchor on the lower target of US$2,050 because they focus more on risks like rate cuts, credit losses or acquisition execution. Seeing these different Narratives side by side can help you stress test your own view before making any decisions.

Do you think there's more to the story for First Citizens BancShares? Head over to our Community to see what others are saying!

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.