Last Update 20 Feb 26

FIBK: Buybacks And Index Additions Will Balance Mixed Street Sentiment

Analysts have kept their fair value estimate for First Interstate BancSystem steady at $38.00, while fine tuning assumptions around discount rate, growth, and future P/E after a mix of recent price target increases and decreases across the Street.

Analyst Commentary

Recent Street research on First Interstate BancSystem reflects a mixed but active debate around the stock, with several firms adjusting price targets and one high profile downgrade. While the fair value estimate here remains at $38.00, analysts are framing their views around how execution risk and growth potential compare with that valuation.

Bullish Takeaways

Bullish analysts who lifted price targets highlight room for the shares to close some of the gap to mid cap peers, with updated targets such as US$37 suggesting they see the current valuation as broadly aligned with their base case assumptions.
Some research points to a constructive setup for mid cap banks into 2026, with references to a steeper yield curve, improving loan growth and credit conditions that are described as largely in check. They view this backdrop as supportive for earnings power if management executes well.
Where targets were raised by a few dollars, bullish analysts appear to be fine tuning discount rate and P/E assumptions rather than calling for a major re rating. This indicates they see incremental progress rather than a binary risk profile.
References to robust merger activity across the bank group are seen by some as a potential support for franchise value, as consolidation can help scale and efficiency for well positioned regional players.

Bearish Takeaways

Bearish analysts who downgraded the shares point to a less favorable risk reward trade off at current levels, suggesting the stock price may already reflect much of the upside they are willing to underwrite given their assumptions.
The decision by one firm to trim its price target by US$2 signals concern around the pace of earnings progress, with caution that execution on growth and balance sheet optimization may not fully track the more optimistic mid cap bank outlooks.
Cautious analysts also note that sector wide optimism about loan growth and credit may not translate evenly to every name. As a result, they apply more conservative P/E multiples and discount rate inputs when they update their models.
The presence of both target cuts and a downgrade indicates that at least part of the Street is more focused on downside protection and is reluctant to pay up for future growth without clearer evidence in reported results.

What's in the News

For the fourth quarter of 2025, First Interstate BancSystem reported net charge-offs of $22.1 million, or an annualized 0.56% of average loans outstanding, compared with $2.3 million, or 0.06%, in the third quarter of 2025 and $55.2 million, or 1.22%, in the fourth quarter of 2024 (Key Developments).
From October 1, 2025 to December 31, 2025, the company repurchased 2,807,097 shares, representing 2.7% of shares, for $90.14 million. This completed a total repurchase of 3,650,000 shares, or 3.5%, for $117.6 million under the buyback announced on August 28, 2025 (Key Developments).
On January 27, 2026, First Interstate BancSystem increased its equity buyback authorization by an additional $150 million, bringing the total buyback authorization to $300 million (Key Developments).
First Interstate BancSystem, Inc. (NasdaqGS:FIBK) was added to the S&P 1000 index (Key Developments).
The company was also added to the S&P 600, the S&P 600 Financials sector index, and the S&P Composite 1500 (Key Developments).

Valuation Changes

Fair Value: The fair value estimate is unchanged at $38.00, indicating no adjustment to the central valuation anchor in the model.
Discount Rate: The discount rate has risen slightly from 6.956% to 6.978%, a small change that modestly increases the implied required return.
Revenue Growth: Revenue growth assumptions remain effectively steady at 117.6892%, which reflects only a minor model precision update rather than a shift in outlook.
Net Profit Margin: Net profit margin is essentially unchanged at about 47.16%, with the figure at 47.155524%, indicating a technical refinement rather than a new profitability view.
Future P/E: The future P/E multiple has fallen slightly from 8.39x to 8.31x, suggesting a marginally more conservative earnings multiple while keeping the overall valuation framework intact.

Focus on high-growth markets, digital expansion, and operational efficiency is expected to strengthen long-term profitability and competitive positioning.
Strong capital and liquidity levels provide flexibility for value creation and support for shareholder returns through multiple strategic options.
Declining loan balances, rising asset quality concerns, and overreliance on slow-growth core markets threaten revenue growth, diversification, and long-term competitiveness.

Catalysts

About First Interstate BancSystem

Operates as the bank holding company for First Interstate Bank that provides a range of banking products and services in the United States.What are the underlying business or industry changes driving this perspective?

With over 70% of its deposits located in markets growing faster than the national average and a large, low-cost granular deposit base, First Interstate is poised to benefit from ongoing economic and population expansion in the Mountain West and Midwest, supporting long-term organic loan and deposit growth, which should positively impact future revenues and earnings.
The company is actively optimizing its branch footprint by divesting lower-growth markets and focusing capital investment and resources on high-growth areas, while maintaining disciplined cost management-this should drive improved operational efficiency and support higher net margins over time.
Strategic efforts to enhance digital capabilities-including outsourcing consumer credit card operations, investing in production-driven areas, and maintaining expense discipline-position First Interstate to expand its mobile/digital banking reach and improve operational leverage, which is expected to gradually boost net margins and long-term profitability.
Proactive repricing of maturing fixed and adjustable-rate loans, combined with disciplined credit and asset-liability management, is anticipated to drive continued improvement in net interest margins and a high single-digit increase in net interest income in 2026, even assuming flat loan balances.
Strong capital and liquidity levels, further enhanced by the Arizona and Kansas branch transaction, give the company multiple options for value creation (e.g., share repurchases, organic investment, or future M&A), increasing flexibility to support shareholder returns and earnings growth through 2026 and beyond.

First Interstate BancSystem Earnings and Revenue Growth

First Interstate BancSystem Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming First Interstate BancSystem's revenue will grow by 6.8% annually over the next 3 years.
Analysts assume that profit margins will increase from 24.5% today to 60.3% in 3 years time.
Analysts expect earnings to reach $686.4 million (and earnings per share of $2.94) by about September 2028, up from $229.5 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $1.2 billion in earnings, and the most bearish expecting $288.6 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 6.0x on those 2028 earnings, down from 14.8x today. This future PE is lower than the current PE for the US Banks industry at 11.9x.
Analysts expect the number of shares outstanding to grow by 0.31% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 6.79%, as per the Simply Wall St company report.

First Interstate BancSystem Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Persistent declines in loan balances-due to intentional exits from indirect and credit card lending, payoffs of large loans, and runoff in certain segments like multifamily construction-raise concerns about the bank's ability to generate organic loan growth, posing a risk to future revenue and net interest income.
Elevated increases in criticized loans (up 17.2% quarter-over-quarter), particularly from multifamily projects experiencing slower lease-up, signal underlying asset quality pressures that may translate into higher credit costs or charge-offs, potentially impairing earnings and capital.
Strategic focus on core markets with high existing market share could lead to overexposure to slow-growing or economically concentrated regions, limiting revenue diversification and increasing vulnerability to local downturns, negatively impacting earnings stability.
Outsourcing of the consumer credit card portfolio and related loan sales, while neutral to short-term net income, reduce potential sources of noninterest income and future revenue stream diversification, increasing reliance on traditional lending margins.
Ongoing cost-cutting and branch optimization actions suggest pressure to protect profitability, but sustained underinvestment in technology, talent, or front-line capabilities could erode competitive positioning against fintechs and larger banks, constraining long-term earnings growth and net margins.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $32.25 for First Interstate BancSystem based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $38.0, and the most bearish reporting a price target of just $28.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $1.1 billion, earnings will come to $686.4 million, and it would be trading on a PE ratio of 6.0x, assuming you use a discount rate of 6.8%.
Given the current share price of $32.49, the analyst price target of $32.25 is 0.7% lower. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Analysts Raise First Interstate BancSystem Target Price Amid Buyback Plans and Improved Margins