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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
First Republic Bank (XNYS:FRC) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
FRC
Name:
FIRST REPUBLIC BANK (XNYS:FRC)
Sector:
- 45000.00K
Industry:
Banks�Regional
CEO:
Mr. James Herbert
Total Employees:
6,452
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 357.81% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF FIRST REPUBLIC BANK(FRC) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND BANKS�REGIONAL INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
149.24
One Month Price Target:
$150.17
Six Month Price Target :
$154.82
Likely Price in One Year's Time:
Ticker:
$160.4
Likely Trading Range Today Under (Normal Volatility)
$148.75
Price Upper limit ($) :
$149.94
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$142.13
This week:
$133.34
This month :
$117.45
Other Primary facts
Market Cap:
27.07B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
182.72M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
12.88%
-14.35%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$182.22
$166.99
$116.26
$131.49
Medium risk (<10%) entry points
Buy Call
Sell Call
$162.04
Buy Put:
Sell Put:
$158.79
$136.40
$139.69
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
FRC
Sharpe Ratio:
2.55%
Comparison:
FRC, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 107.96% higher than the industry
& ratio is 12.08% higher than the market/S&P 500 average
Average Returns/Yield of
FRC
Daily returns:
0.07%
Weekly returns:
0.34%
Monthly returns:
1.38%
Yearly returns:
10.91%
Comparison of returns:
Average annual returns/yield (last 3 years) is 51.69% above industry average
Classification:
FRC, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.91
Statistical test of Returns:
FRC has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.35%
Weekly Volatility:
5.26%
Monthly Volatility:
10.52%
Yearly Volatility:
36.45%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.51%
Volatility in last five trading days has been -78.21% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.76%
Weekly VaR:
-10.65%
Monthly VaR:
-21.30%
How Much Can the price of
FRC
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-18%
Worst case (decline):
-73.80%
This translates to price declining to:
$122.31
This translates to price declining to:
$39.10
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
FRC is a 50.36% riskier investment compared to the market/S&P 500 & is 28.81% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -17.63% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
FRC
Beta in relation to market/S&P 500--1.11
Expected beta in 1 year's time:
0.774
Expected beta in 3 year's time:
1.095
Unlevered (debt free) Beta:
0.826
Beta in relation to Nasdaq (XNAS):
0.812
Beta in relation to all global stocks::
0.82
Beta Comparison & Analysis
Beta of competitors/peers::
1.042
Beta is 6.81% higher than peers
Average Industry Beta:
0.964
Beta is 15.47% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
9.22%
Sustainable growth rate is 1.01% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.058
Alpha is 398.13% above industry average alpha yield
Alpha is 368% higher than market/& is unsustainably high
Analysis of Cost of Capital of
FRC
Equity cost of capital:
0.108
Equity cost of capital is 10.47% above industry mean WACC
Unlevered (without debt) cost of capital:
7.99%
Before-tax cost of debt:
3.32%
After-tax cost of debt:
2.63%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.63%
WACC is -8.88% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$28.55
Revenue growth rate per share of (3Y):
1.69
Annual revenue growth rate is 82.14% above the industry average
EPS:
$7.87
Expected Annual growth rate of EPS (3Y):
13.42%
Expected future EPS growth rate is 11.63% higher than the Banks�Regional industry
Free cash flow (FCF) per share:
$8.02
Balance sheet equity growth per share: 33.19%
Equity growth rate per share is -14.29% lower than the industry
Debt per share
$38.17
EBITDA per share
$12.82
Valuation Analysis Today of
FRC
P/E Ratio:
18.47
P/E Ratio of Competitors/Peers:
9.46
P/E ratio is 95.24% higher than main peers & is 48.81% higher than the industry
Stock price/value with industry average P/E ratio: $97.66
FRC is 52.82% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $28.96
Present value of the expected future dividends only: $13.85
P/S (Price to Sales ratio):
5.23
Price to sales ratio is 22.23% above the industry mean
P/B (Price to book value ratio):
1.69
Price to free cash flow: 18.61
Price to free cash flow ratio is 794.65% higher than the industry
Net income growth rate (3Y):
59.36%
Net income growth rate is 7.79% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 4.99%
Dividend yeild: 0.62%
Previous Dividend: $0.27
Previous adjusted dividend: $0.27
Previous Dividend: $0.93
Expected next dividend best case: $0.29
Expected next dividend worst case: $0.25
Average dividend payment (long-term): $0.21
Average dividend increase/decrease (growth rate) % per period: 3.80%
Expected next dividend payment date: 08/10/2022
Expected next dividend record date: 27/07/2022
Expected next dividend declaration date: 07/12/2022
Previous dividend payment date: 05/12/2022
Previous dividend record date: 28/04/2022
Previous dividend declaration date: 13/04/2022
Dividend History:
2022-04-27--$0.27
2021-10-27--$0.22
2021-04-28--$0.22
2022-01-26--$0.22
2021-07-28--$0.22
2021-01-27--$0.20
Dividend growth rate is -83.87% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
43.17%
Net debt to equity ratio:
-4.84%
Debt to assets ratio:
3.73%
Net debt to assets ratio:
-0.42%
Debt-to-asset ratio is -97.76% below industry average
Ability to repay debt:
Interest coverage ratio:
10.11
Interest coverage ratio is 1119.57% more than industry average
Looking forward:
Debt growth rate:
-52.62%
Annual debt growth is -16715% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.727
Statistical significance of correlation:
FRC has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.501
Stock price is 45.25% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.501
Correlation of price movement with Nasdaq (^IXIC):
-0.008
Covariance of price movement with the market:
-0.011
Kurtosis
5.429
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.067
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
FRC
Gross Profit Margin Ratio:
-
Operating Profit Margin Ratio:
0.00%
-
Net Profit Margin Ratio:
-
Effective Tax Rate:
19.54%
Effective tax rate is -9.32% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
9.56%
Return on equity (ROE) is -19.87% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
0.83%
Return on assets (ROA) is -64.19% lower than the industry
Financial Leverage:
1.0x
Current Ratio:
0
-
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 7.4 years
Stock based compensation to net income ratio:
2.59%
In-depth Efficiency Analysis
Revenue generated per employee:
808.5K
Each employee generates 113% more revenue than industry average revenue per employee
EBITDA generated per employee:
363.2K
Each employee generates 61% more EBITDA than industry average revenue per employee
Profit generated per employee:
239.3K
Each employee generates 69% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 7.0K
Each employee generates -108% less free cash flow than industry average revenue per employee
Assets/Capital per employee
5.2M
Each employee generates -108% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
FRC
DISCOVER FINANCIAL SERVICES (XNYS:DFS)
THE ALLSTATE CORPORATION (XNYS:ALL PR H)
STATE STREET CORPORATION (XNYS:STT)
NATWEST GROUP PLC (XNYS:NWG)
Banco Bradesco SA (XNYS:BBD)
ARTHUR J. GALLAGHER & CO. (XNYS:AJG)
Itau Unibanco Holding SA (XNYS:ITUB)
Pathward Financial, Inc. (XNAS:CASH)
MANULIFE FINANCIAL CORP (XNYS:MFC)
Current Analyst Ratings
Strong buy�13%
Buy�25%
Hold�54%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
5.22B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
-
-
-
2.21B
2.27B
64.37M
-
-
4.55B
231.82M
192.22M
2.34B
-
1.54B
1.92B
374.99M
1.54B
Statement of Cash Flow
Date:
Period:
51.00M
Differed Income Tax :
92.00M
Stock Based Compensation :
40.00M
Change in Working Capital :
- 228000.00K
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
- 346000.00K
Net Cash Provided by Operating Activities:
10.00M
Investments in PP&E:
- 55000.00K
Net Acquisitions:
-
Purchases of Investments:
- 4924000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
7.76B
214.00M
7.97B
482.00M
-
-
-
1.88B
172.00M
64.00M
31.53B
-
-
33.65B
220.77B
187.12B
-
-
-
-
-
-
6.97B
-
6.97B
177.94B
170.97B
2.00M
6.89B
- 137000.0K
5.76B
March 31, 2022 at 6:00:00 AM
-
16.15B
187.12B
31.75B
6.97B
- 782000.0K
510.00M
- 6389000.00K
- 10858000.00K
-
-
-
- 77000.00K
5.73B
5.66B
-
- 5191000.00K
7.76B
12.95B
10.00M
- 55000.00K
- 45000.00K
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
FRC
2023
2024
2025
2026
2027
$162.56
$174.72
$187.78
$201.82
$216.91