Last Update23 Oct 25Fair value Increased 1.36%
Narrative Update on BOK Financial
Analysts have raised their fair value estimate for BOK Financial from $117.60 to $119.20. This change is based on expectations for stronger non-interest-bearing deposit growth and sustained loan performance in key regional markets.
Analyst Commentary
Recent analyst updates reflect growing confidence in BOK Financial’s future performance, particularly as the company continues to benefit from favorable trends in its regional banking operations.
Bullish Takeaways
- Bullish analysts highlight expectations for improvement in the non-interest-bearing deposit mix, which would support a more favorable funding profile over time.
- There is a positive outlook on loan growth, with projections that BOK Financial will achieve above-average expansion within its loan portfolio.
- Nearly half of the company’s loan exposures are concentrated in robust regional markets, specifically Texas and Oklahoma. These markets are described as strong-performing and provide a foundation for ongoing execution strength.
- Analysts also point to BOK Financial's strong capital position, which is seen as enabling both shareholder buybacks and opportunities for organic growth that could drive further valuation upside.
Bearish Takeaways
- Some analysts express caution over the bank’s ability to sustain these growth rates in a potentially volatile interest rate environment.
- There is ongoing scrutiny regarding competition for deposits, which could pressure margins if industry dynamics shift unfavorably.
- Concerns remain about the reliance on regional markets, with risks if Texas or Oklahoma experience an economic slowdown that could impact credit quality or demand for new lending.
What's in the News
- BOK Financial has provided 2025 earnings guidance, expecting net interest income of $1.325 billion to $1.35 billion and projecting mid-single-digit total revenue growth compared to the prior year (Corporate Guidance).
- The company completed the repurchase of 365,547 shares, representing 0.57% of shares for $40.58 million, as part of the buyback announced on July 30, 2025 (Buyback Update).
- No shares were repurchased from July 1, 2025 to July 29, 2025. The total buybacks since November 2022 now amount to 4,130,318 shares or 6.29% for $360.17 million (Buyback Update).
- For the third quarter ended September 30, 2025, net charge-offs reported were $3.63 million (Impairments/Write Offs).
- The Board of Directors authorized a new buyback plan on July 29, 2025. This plan allows up to 5,000,000 shares to be repurchased (Buyback Announcement).
Valuation Changes
- The Fair Value Estimate has increased slightly from $117.60 to $119.20.
- The Discount Rate has decreased modestly from 7.21% to 7.17%.
- The Revenue Growth forecast has edged down from 5.91% to 5.86%.
- The Net Profit Margin is marginally lower, moving from 24.09% to 23.95%.
- The Future P/E Ratio has declined from 15.13x to 14.70x.
Key Takeaways
- Strategic expansion into growth regions and enhanced digital banking drive operational efficiencies, increased loan activity, and resilient earnings diversification.
- Robust wealth management fueled by demographic trends and strong fee income streams supports sustained, stable growth amid shifting economic conditions.
- Concentrated loan risk, regional dependence, margin pressure, rising costs, and competitive threats could hinder growth, earnings, and profitability for BOK Financial over time.
Catalysts
About BOK Financial- Operates as the financial holding company for BOKF, NA that provides various financial products and services in Oklahoma, Texas, New Mexico, Northwest Arkansas, Colorado, Arizona, and Kansas/Missouri.
- Sustained population and economic growth in the Sun Belt and Midwest regions are driving strong demand for lending, commercial real estate, and wealth management-reflected in accelerating loan growth in core C&I, CRE, and new mortgage finance initiatives-supporting ongoing revenue expansion.
- Broader adoption of digital banking, combined with BOK Financial's continued investments in technology and customer experience, is expected to yield long-term operational efficiencies, reduce operating costs, and enhance net margins.
- Rising intergenerational wealth transfers and an increased focus on retirement planning are fueling robust growth in the wealth management and fiduciary business, as seen in record asset management revenue and consistent high-single-digit growth rates, strengthening diversified fee-based income streams.
- BOK Financial's strategic expansion into fast-growing markets like Texas and Arizona, alongside talent acquisition in key markets, positions the company to capitalize on secular migration and economic trends, propelling above-peer loan and revenue growth.
- The company's diversified fee income-including trading, wealth management, and treasury services-provides resilience against interest rate fluctuations and contributes to a more stable and growing earnings base.
BOK Financial Future Earnings and Revenue Growth
Assumptions
How have these above catalysts been quantified?- Analysts are assuming BOK Financial's revenue will grow by 5.9% annually over the next 3 years.
- Analysts assume that profit margins will shrink from 25.6% today to 23.5% in 3 years time.
- Analysts expect earnings to reach $579.1 million (and earnings per share of $9.36) by about September 2028, up from $530.5 million today.
- In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 15.3x on those 2028 earnings, up from 13.3x today. This future PE is greater than the current PE for the US Banks industry at 11.9x.
- Analysts expect the number of shares outstanding to decline by 0.79% per year for the next 3 years.
- To value all of this in today's terms, we will use a discount rate of 7.27%, as per the Simply Wall St company report.
BOK Financial Future Earnings Per Share Growth
Risks
What could happen that would invalidate this narrative?- Overconcentration in the commercial real estate (CRE) and energy loan portfolios presents elevated credit risk, especially as recent growth in CRE could expose BOK Financial to sector-specific downturns; this may result in higher-than-expected loan losses, negatively impacting net income and earnings over the long term.
- BOK Financial remains heavily dependent on the economic health of the Midwest and Southwest regions, so any localized economic downturns or demographic stagnation could disproportionately hamper deposit and loan growth, limiting revenue expansion and overall earnings potential.
- The company acknowledged ongoing "hypercompetitive" market conditions in its core regions, which may continue to drive spread and margin compression in C&I lending, limiting net interest margin and net interest income growth in the coming years.
- Rising technology and operational costs, such as those related to the build-out of the new mortgage finance business and ongoing digital investments, could pressure expense growth relative to revenue if scale benefits fail to materialize, weakening net margins and return on equity.
- Heightened regulatory focus and increasing compliance/technology demands, alongside the persistent threat from fintech and non-bank competitors, may raise structural costs and make it more difficult to attract younger, digitally native customers-potentially resulting in lower deposit growth, reduced fee income, and long-term margin dilution.
Valuation
How have all the factors above been brought together to estimate a fair value?- The analysts have a consensus price target of $116.1 for BOK Financial based on their expectations of its future earnings growth, profit margins and other risk factors.
- In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $2.5 billion, earnings will come to $579.1 million, and it would be trading on a PE ratio of 15.3x, assuming you use a discount rate of 7.3%.
- Given the current share price of $110.58, the analyst price target of $116.1 is 4.8% higher. 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.
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