First Interstate BancSys (FIBK:NAS) Fundamental Valuation Report


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First Interstate BancSys $40.85 (USD) Close Price as of 08/03/2018

Based on the analysis conducted in this report, First Interstate BancSys, (FIBK:NAS) is found to be  Fairly valued to slightly Overvalued.

Company First Interstate BancSys
Symbol:Exchange FIBK:NAS
Industry Financial Services:Banks-Regional-US
Close Price/Date $40.85 (USD) 08/03/2018
Weighted Average Valuation $40.02 (USD)
Summary FIBK:NAS is found to be  Fairly valued to slightly Overvalued by 2.0% using the 3 valuation models shown below.
Valuation Models Used Analyst Consensus: $44.00 (USD)
(in order of importance) Adjusted Book Value: $36.41 (USD)
Discounted Cash Flow: $35.32 (USD)
Valuation Methods Analysis This company is:
Cash Flow Basis: Overvalued on a Cash Flow Valuation basis
Comparable Company Basis: Undervalued on a Comparable Valuation basis
Asset Basis: Overvalued on an Asset Valuation basis

Valuation Details

First Interstate BancSys Valuations

Summary chart

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for FIBK:NAS

Using a discounted cash flow model we generated an intrinsic value of $35.32 (USD) for FIBK:NAS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

FIBK:NAS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $35.32 1% 5% 1% 5%
WACC (or Ke) 9.42 $41.85 $30.55
Terminal Growth Rate 3.00 $31.10 $41.11
Tax Rate 0.32 $37.92 $32.72
Cash Flow 206,518,117 $33.56 $37.09
Capital Expenditures 0 $35.32 $35.32
Long Term Debt 0 $35.32 $35.32

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $46.62 (USD) for FIBK:NAS. We also generated a valuation of $88.50 (USD) using other metrics and comparables.
The comparable companies were Eagle Bancorp (EGBN:NAS), FCB Financial Holdings (FCB:NYS), Hope Bancorp (HOPE:NAS), Independent Bank Gr (IBTX:NAS) and Independent Bank (INDB:NAS)

Company FIBK:NAS End Date Value
Earnings/Share $2.05 (USD)
Book Value/Share $25.27 (USD)
Sales/Share $9.47 (USD)
Cash Flow/Share $2.98 (USD)
EBITDA/Share $3.72 (USD)
Price Based on Comps Adjustment Factor (%)
$45.12 (USD) -25.3
$48.77 (USD) 15.3
$60.41 (USD) 16.5
$48.33 (USD) -45.8
($2.23) (USD) -72.9
FIBK:NAS Ratios Used Average Values EGBN:NAS FCB:NYS HOPE:NAS IBTX:NAS INDB:NAS
20.07 PE Ratio 22.01 21.83 21.13 18.58 25.32 23.20
1.63 PB Ratio 1.93 2.30 2.26 1.35 1.60 2.16
4.34 PS Ratio 6.38 6.98 7.99 4.74 6.25 5.93
13.81 PCF Ratio 16.22 13.63 16.09 12.74 23.16 15.47
0.00 EV to EBITDA 0.00 0.00 0.00 0.00 0.00 0.00

Multiples

Using a multiples approach we generated a valuation of  $30.33 (USD) for FIBK:NAS

Company FIBK:NAS End Date Value
Earnings/Share $2.05 (USD)
Book Value/Share $25.27 (USD)
Sales/Share $9.47 (USD)
Cash Flow/Share $2.98 (USD)
EBITDA/Share $3.72 (USD)
Price Based on Comps Adjustment Factor
$32.05 (USD) 0
$36.43 (USD) 0
$34.01 (USD) 0
$32.63 (USD) 0
$16.51 (USD) 0
Ratios Ratio Average
PE Ratio 15.64
PB Ratio 1.44
PS Ratio 3.59
PCF Ratio 10.95
EV to EBITDA 4.44

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  FIBK:NAS for the last 8 years was  1.44

We ran the Adjusted Book Value for  FIBK:NAS and generated a book value of  $25.28 (USD)
By multiplying these we get an adjusted valuation of  $36.41 (USD)

Analyst Data

In the Stockcalc database there are 2 analysts that provide a valuation for FIBK:NAS. The 2 analysts have a concensus valuation for FIBK:NAS for 2018 of $44.00 (USD).

FIBK:NAS First Interstate BancSys

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
0 2 0 3.0000 Hold 2018-3-7

Current Price: not available

Analyst Consensus
USD Millions 2018 2019
Mean EPS 2.91 3.05
# EPS Analysts 2 2
Mean Revenue 547.80 563.40
# Revenue Analysts 1 1
Mean Target Price 44.00
Mean Cash Flow
Mean EBITDA
Mean Net Income 165.30 176.10
Mean Debt Outstanding
Mean Tax Rate 23.30 23.30
Mean Growth Rate 10.00
Mean Capital Expenditure

Company Overview (FIBK:NAS USD)

Price 40.85
Range 40.50 – 41.30
52 week 33.65 – 42.80
Open 41.30
Vol / Avg. 157307/112703
Mkt cap 2.31B
P/E 20.07
Div/yield 1.12/0.02
EPS 2.05
Shares 56.46M
Beta 1.47
Summary chart

Detailed Company Description

First Interstate BancSystem Inc is a financial and bank holding company. It delivers a range of banking products and services to individuals, businesses, municipalities and other entities.

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.
The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).
The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.
We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.
Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.
With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.
If we have Analyst coverage for the company we use the consensus target price here.

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