Cullen/Frost Bankers, Inc.: Upgrading to HOLD; Asset Sensitivity & Exp Growth Moderation Improve Outlook

研报英文原文证据摘录

Cullen/Frost Bankers, Inc.: Upgrading to HOLD; Asset Sensitivity & Exp Growth Moderation Improve Outlook

USA | Large-Cap & Mid-Cap Banks

Cullen/Frost Bankers, Inc. EquityJulyResearch6, 2026

RATING | TARGET CHANGEUpgrading to HOLD; Asset Sensitivity & Exp

RATING HOLD (UNDERPERFORM)Growth Moderation Improve Outlook

PRICE $154.86^

We're upgrading CFR to HOLD from UNPF. Our prior rating reflected CFR's

premium valuation coupled with below-peer EPS growth. While both remain PRICE TARGET | % TO PT $160.00 ($135.00) | +3%

headwinds, we believe the risk/reward balance has shifted incrementally more 52W HIGH-LOW $157.34 - $119.00

favorable. Specifically, CFR's asset sensitivity screens as a positive on rising FLOAT (%) | ADV MM (USD) 93.2% | 92.28

rate hike expectations, which, combined with moderating expense growth, MARKET CAP $9.8B

could incrementally support operating leverage and the EPS trajectory. TICKER CFR ^Prior trading day's closing price unless otherwise

noted.

We view CFR as well positioned to benefit from a higher-for-longer rate environment given its

asset sensitivity. Each foregone rate cut of 25 bp and each potential 25 bp hike is estimated to

FY (Dec) CHANGE TO JEFe JEF vs CONS

benefit NII by $2 mn per month and Fed funds futures are pricing in a rate hike by year-end 2026. We

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believe there could be potential NIM/NII upside given CFR's guidance from April assumed one cut in

4Q'26. Beyond its natural asset sensitivity, we believe CFR should benefit from meaningful repricing EPS* NA NA NM NM

tailwinds, including $250 mn of sub-1% yielding Treasuries maturing in 3Q'26 and $800 mn of fixed- REV* NA NA -2% -3%

rate loans that could reprice 75+ bp over the remainder of the year. We view CFR's funding profile