Value
6.4/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 8.0 |
| P/S | 7.4 |
| Fwd P/E | 8.6 |
| PEG | 3.8 |
| Analyst target | 4.0 |
- ▸Forward P/E: 13.2x
- ▸PEG: 2.90
CFR · Why this verdict
Why Cullen/Frost Bankers (CFR) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictBUY WAIT
Overall score5.6/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Cullen/Frost Bankers combines a perfect four-quarter earnings beat record and strong price momentum with a highly concentrated loan book and a stock that has already surpassed its price target — leaving virtually no reward-to-risk cushion at current levels.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
More than 80% of the loan book is concentrated in commercial and industrial, energy, construction, and commercial real estate — a combination flagged as three high-severity and one medium-severity concentration risk that amplifies earnings volatility in a credit cycle downturn. Bear case | Non-performing loans remain below 1% of total loans and net charge-offs stay below 0.5% in each of the next two reported quarters, keeping the concentration from translating into realized losses. | ↑Improving |
| CounterThe bank's 30% net margin and Piotroski score of 8 out of 9 reflect high current credit quality, suggesting the concentration is being well-managed; historical navigation of Texas energy cycles may indicate resilience the headline flag does not capture. | ||
The bank has beaten consensus estimates in each of the last four quarters with an average upside surprise of roughly 6.4%, including a near-12% beat in the third quarter of 2025, demonstrating persistent delivery well above market expectations. Earnings | Average quarterly EPS surprise stays above 3% and the beat streak extends through the next two reported quarters. | ↑Improving |
| CounterSurprise magnitude has ranged widely — from 3.5% to nearly 12% — making the average somewhat misleading; if investor expectations have been reset higher on the back of the larger beats, even a 3–4% beat may disappoint. | ||
The stock trades above its 200-day moving average with rising volume accumulation — including a 2.4x average-volume surge even on selloff days — signaling institutional demand that has yet to exhaust itself. Momentum breakdown | Stock stays above its 200-day moving average and the OBV trend remains positive for the next 8 consecutive weeks. | ↓Deteriorating |
| CounterAn elevated put/call ratio of 1.33 shows meaningful hedging activity alongside the momentum, and a concentrated uninsured deposit base adds macro sensitivity that could rapidly reverse technical strength if credit conditions deteriorate. | ||
The stock sits just below its resistance target of $145.63 with only 0.4% of headroom remaining and a risk/reward of 0.09-to-1 — an asymmetry so thin that even a small adverse move erodes the entire potential gain many times over. Price targets | This pillar is falsified when the stock establishes new highs decisively above $146 and a fresh reward-to-risk greater than 1.5-to-1 opens from that base. | →Stable |
| CounterA catalyst-driven re-rating — such as an analyst target upgrade following a strong quarter — could quickly expand upside headroom and change the entry calculus well before the stock pulls back. | ||
The dividend yield is flagged as potentially unsafe, suggesting the income stream may be at risk of a reduction if earnings growth slows from its current elevated pace. Catalyst breakdown | Dividend per share is maintained or increased over the next two declared distributions without the payout ratio exceeding 100% of reported EPS. | ↑Improving |
| CounterA bank consistently beating estimates with strong margins and a high Piotroski score has meaningful financial flexibility; the safety flag may be setting a conservative bar that overstates the actual near-term payout risk. | ||
More than 80% of the loan book is concentrated in commercial and industrial, energy, construction, and commercial real estate — a combination flagged as three high-severity and one medium-severity concentration risk that amplifies earnings volatility in a credit cycle downturn.
↑ImprovingBear case
- Expectation
- Non-performing loans remain below 1% of total loans and net charge-offs stay below 0.5% in each of the next two reported quarters, keeping the concentration from translating into realized losses.
CounterThe bank's 30% net margin and Piotroski score of 8 out of 9 reflect high current credit quality, suggesting the concentration is being well-managed; historical navigation of Texas energy cycles may indicate resilience the headline flag does not capture.
The bank has beaten consensus estimates in each of the last four quarters with an average upside surprise of roughly 6.4%, including a near-12% beat in the third quarter of 2025, demonstrating persistent delivery well above market expectations.
↑ImprovingEarnings
- Expectation
- Average quarterly EPS surprise stays above 3% and the beat streak extends through the next two reported quarters.
CounterSurprise magnitude has ranged widely — from 3.5% to nearly 12% — making the average somewhat misleading; if investor expectations have been reset higher on the back of the larger beats, even a 3–4% beat may disappoint.
The stock trades above its 200-day moving average with rising volume accumulation — including a 2.4x average-volume surge even on selloff days — signaling institutional demand that has yet to exhaust itself.
↓DeterioratingMomentum breakdown
- Expectation
- Stock stays above its 200-day moving average and the OBV trend remains positive for the next 8 consecutive weeks.
CounterAn elevated put/call ratio of 1.33 shows meaningful hedging activity alongside the momentum, and a concentrated uninsured deposit base adds macro sensitivity that could rapidly reverse technical strength if credit conditions deteriorate.
The stock sits just below its resistance target of $145.63 with only 0.4% of headroom remaining and a risk/reward of 0.09-to-1 — an asymmetry so thin that even a small adverse move erodes the entire potential gain many times over.
→StablePrice targets
- Expectation
- This pillar is falsified when the stock establishes new highs decisively above $146 and a fresh reward-to-risk greater than 1.5-to-1 opens from that base.
CounterA catalyst-driven re-rating — such as an analyst target upgrade following a strong quarter — could quickly expand upside headroom and change the entry calculus well before the stock pulls back.
The dividend yield is flagged as potentially unsafe, suggesting the income stream may be at risk of a reduction if earnings growth slows from its current elevated pace.
↑ImprovingCatalyst breakdown
- Expectation
- Dividend per share is maintained or increased over the next two declared distributions without the payout ratio exceeding 100% of reported EPS.
CounterA bank consistently beating estimates with strong margins and a high Piotroski score has meaningful financial flexibility; the safety flag may be setting a conservative bar that overstates the actual near-term payout risk.
Per-dimension breakdown
Quality
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.2 |
| ROA | 0.9 |
| Gross margin | 0.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Moat | 5.2 |
| Piotroski F | 8.9 |
- ▸Strong margins: 30%
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 8/9
Growth
4.3/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.0 |
| EPS growth | 4.6 |
Momentum
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 7.0 |
| Volume | 5.2 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 6.5 |
| erm sentiment | 6.2 |
Insider
6.1/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 6.2 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
4.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.1 |
| quality rank | 6.4 |
| growth rank | 2.9 |
- ▸Superior ROE vs peers
Technical
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.3 |
| support resistance | 1.9 |
| 52w position | 8.5 |
Risk (lower is worse)
7.8/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 10.0 |
| days to cover | 10.0 |
| volatility | 8.2 |
| put call | 6.7 |
| implied vol | 6.9 |
| max pain risk | 3.0 |
| beta | 9.7 |
- ▸Above max pain $130
- ▸Concentration risks: 3 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 7.5 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 7.2 |
| dividend safety | 5.5 |
- ▸Perfect beat streak: 4Q
- ▸Earnings today
How the verdict was assembled
Engine trigger
Earnings today. Wait until post-earnings.
Engine technical detail
verdict_path:
L3:NEWS_BLOCK|ENTRY_STICKY:WITHIN_BANDPassed (6)
- MOMENTUM:5.6>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:-0.6=NEGATIVE
- EARNINGS_PROXIMITY:0d<=7d
Warning (0)
none
Reward-to-Risk
-0.59
Upside
-4.3%
Downside
7.3%
Sizing output
STARTER
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
A recent news event triggered an L3 news-block on the verdict path. Trigger: Earnings today. Wait until post-earnings. The 10-dimension scores remain Risk (lower is worse) at 7.8 (strongest), but ASYMMETRY:-0.6=NEGATIVE also fails — the news block is the proximate trigger, not the sole driver.
The strongest dimensions are Risk (lower is worse) at 7.8, Catalyst at 7.0, and Value at 6.4; the weakest are Peer rank at 4.1, Technical at 4.2, and Growth at 4.3. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of -0.59 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Consistent Earnings Outperformance
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P2Strong Price Momentum
Trip ifStock drops below its 200-day moving average and OBV turns negative for 4 consecutive weeks.
- P3Loan Portfolio Concentration Risk
Trip ifNon-performing loans exceed 1.5% of total loans in any reported quarter.
- P4Target Reached Minimal Upside
Trip ifStock breaks above $150 establishing a new reward-to-risk greater than 1.5-to-1 from that base.
- P5Dividend Sustainability Concern
Trip ifDividend is cut by more than 10% in any declared distribution over the next 12 months.