UMB Financial Corporation
UMBF
$133.77
-0.69%
UMB Financial Corporation is a financial services holding company operating through Commercial Banking, Institutional Banking, and Personal Banking segments, providing commercial loans, treasury management, commercial real estate financing, asset servicing, and wealth management to commercial, institutional, and personal clients across the United States and internationally. UMBF occupies a distinctive niche as a high-touch, relationship-driven regional bank with an unusually diversified revenue base that blends traditional spread lending with fee-generating institutional and asset-servicing businesses, giving it a more resilient earnings profile than a pure-play commercial lender. The current investor narrative centers on the post-acquisition earnings inflection visible in the Q3 2026 results, where net income of $278 million and EPS of $3.58 comfortably exceeded expectations on double-digit revenue growth and improved operating efficiency, alongside a notable margin expansion story as net interest income benefits from a larger balance sheet. Debate now hinges on whether this profitability step-up is durable — the trailing twelve-month EPS of roughly $0.08 in the key-metrics feed appears distorted by share-count and reporting artifacts, while the quarterly income statement shows a far healthier run-rate — and on how much of the efficiency gain can be sustained as deposit costs and credit normalization evolve.…
UMBF
UMB Financial Corporation
$133.77
Related headlines
Investment Opinion: Should I buy UMBF Today?
Rating: Buy. UMBF offers an asymmetric risk/reward at $136.09, with all 16 covering analysts holding targets above the current price (low $145.00, average $160.94 implying +18.3% upside) against a consensus recommendation of "buy" and a 1.81 recommendation mean (13 Buy / 3 Hold / 0 Sell). The core thesis is that Q3 2026's earnings step-up — $278.1 million net income at a 24.66% net margin versus 12.63% a year earlier — is being under-valued by a market that still prices the stock at just 9.62x forward earnings and 1.14x book.
Supporting evidence is broad: forward EPS consensus of $15.53 against the $136.09 price yields the 9.62x forward multiple, a 23% compression from the 12.50x trailing PE that implies the market expects continued earnings normalization; revenue has grown sequentially for three quarters ($867.1M to $1,116.9M to $1,127.8M); operating margin of 30.32% in Q3 compares to 14.59% in Q1 2026; TTM free cash flow of $1,168.7 million implies an 11-13% FCF yield on the $8.7-10.4 billion market cap; and the 1.55% dividend yield at a 19.3% payout ratio provides an income floor. The 1.14x P/B against a 9.13% ROE screens at roughly a 10-25% discount to comparable regional banks that often trade at 1.2-1.5x book.
The biggest risks that could invalidate the thesis are margin compression from deposit competition (interest expense already rose to $355.4 million from $338.8 million sequentially, with gross margin slipping to 65.74% from 67.15%), credit normalization that pushes net margin back toward the 12.63% Q3 2025 level, and the data-quality distortion in the trailing EPS feed that clouds valuation comparisons. This Buy would upgrade to a higher-conviction stance if net margin holds above 24% for a fourth consecutive quarter and P/B re-rates toward 1.3x, and would downgrade to Hold if gross margin falls below 63% or if the stock breaks below the $128-$130 support zone. On balance, at 9.62x forward earnings and 1.14x book against a 9.13% ROE, UMBF screens as modestly undervalued relative to both its own historical PE band (7.55x-20.72x) and regional bank peers.
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UMBF 12-Month Price Forecast
UMBF presents a constructive 12-month setup anchored by a confirmed earnings inflection and a valuation that has not yet caught up: at 9.62x forward earnings and 1.14x book, the stock trades in the lower-middle of its own historical PE band (7.55x-20.72x) despite Q3 net margin nearly doubling year-over-year to 24.66%. The unanimous analyst stance — 13 Buy, 3 Hold, 0 Sell, with every target above market and an average of $160.94 — signals high confidence in direction but the $40 target spread ($145-$185) reflects genuine uncertainty about magnitude, which is why confidence is medium rather than high. The base case (55% probability, $155-$165) assumes net margin settles in the low-20s as deposit costs trim some efficiency gains, while the bear case (20%, down to $103.38) hinges on a full margin retracement. I would upgrade to high confidence if Q4 2026 confirms a fourth quarter of ~25% net margin and gross margin holds above 65%, and would downgrade to neutral if gross margin falls below 63% or the stock breaks the $128 support zone.
Wall Street consensus
Coverage is broad and decidedly bullish: 16 analysts cover UMBF with a distribution of 13 Buy, 3 Hold, and 0 Sell, yielding a consensus recommendation of "buy" and a recommendation mean of 1.81 (where 1.0 is a strong buy). The average target price of $160.94 implies roughly +18.3% upside from the current $136.09, and even the lowest target of $145.00 sits about 6.5% above the current price — meaning every published analyst target is above the market, an unusually unanimous signal of undervaluation. The consensus clearly leans bullish, reinforced by the forward EPS estimate of $15.53 and revenue estimate of $3.52 billion.
The target range of $145.00 to $185.00 is wide — a $40 spread, or about 27.6% of the low end — which signals meaningful dispersion in assumptions about the durability of the earnings step-up. The high target of $185.00 (about +36% upside) likely assumes sustained margin expansion, continued double-digit revenue growth, and possibly multiple re-rating toward 1.4-1.5x book as the market recognizes the improved ROE; the low target of $145.00 prices in a more conservative scenario of margin compression from deposit competition or credit normalization. Institutional ratings show remarkable stability — Piper Sandler, TD Cowen, Truist, RBC, JP Morgan, and Morgan Stanley all reiterated Overweight/Buy/Outperform ratings through September and October 2026, with Citigroup and Wells Fargo holding Neutral/Equal Weight — indicating no recent downgrades and a pattern of conviction rather than momentum-chasing. The wide spread combined with unanimous above-market targets suggests high confidence in direction but uncertainty in magnitude, which is typical of a bank mid-way through an earnings inflection.
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Bulls vs Bears: UMBF Investment Factors
The bull case currently holds stronger evidence: Q3 2026 delivered $278.1 million of net income at a 24.66% margin, three consecutive quarters of sequential revenue growth, unanimous above-market analyst targets averaging $160.94 (+18.3%), and a valuation at 9.62x forward earnings and 1.14x book that sits in the lower-middle of UMBF's own historical range. The bear case rests largely on data-quality concerns (the distorted $0.08 TTM EPS and -24.37% headline revenue decline), modest sequential gross-margin slippage, and a three-month relative underperformance of 5.29pp that reflects consolidation rather than deterioration. The single most important tension is whether the Q3 profitability step-up is durable — specifically, whether the ~25% net margin and ~30% operating margin can be sustained as deposit costs and credit normalization evolve; if they hold, the stock is undervalued, but if they compress toward the Q3 2025 level of 12.63%, the entire thesis unravels. With a beta of 0.849 and a maximum drawdown of -18.88%, the risk profile is moderate, and the balance of evidence favors the bulls on a 12-month horizon.
Bullish
- Unanimous analyst targets above market: All 16 covering analysts have targets above the current $136.09 price, with a low of $145.00 (+6.5%) and an average of $160.94 (+18.3%). The 13 Buy / 3 Hold / 0 Sell distribution and 1.81 recommendation mean reflect conviction rather than momentum-chasing, with no downgrades through September-October 2026.
- Earnings inflection confirmed in Q3: Q3 2026 net income of $278.1 million and EPS of $3.58 were up sharply from $2.38 in Q3 2025, with net margin at 24.66% versus 12.63% a year earlier. Sequential revenue growth across three quarters ($867.1M to $1,116.9M to $1,127.8M) confirms the step-up is a trend, not a one-off.
- Valuation discount to peers and history: At 12.50x trailing and 9.62x forward earnings, plus 1.14x book against a 9.13% ROE, UMBF trades at roughly a 10-25% discount to comparable regional banks (often 1.2-1.5x book). Its own PE band has run from 7.55x to 20.72x, placing the current multiple in the lower-middle of history.
- Strong cash generation and dividend cushion: TTM free cash flow of $1,168.7 million implies an 11-13% FCF yield on the $8.7-10.4 billion market cap, with quarterly operating cash flow consistently above $349 million. The 19.3% payout ratio and 1.55% dividend yield leave ample room to fund growth and absorb credit normalization.
Bearish
- Trailing EPS data is distorted: The key-metrics feed shows TTM EPS of roughly $0.08 against a quarterly run-rate of $3.58, producing a nonsensical PEG of 7.54 and a trailing PE of 12.50x that may not reflect true earnings power. Until reporting artifacts are resolved, valuation comparisons rest on uncertain denominators.
- Margin compression risk from deposit costs: Gross margin slipped from 67.15% in Q2 to 65.74% in Q3, and interest expense rose to $355.4 million from $338.8 million sequentially. The analyst low target of $145.00 explicitly prices in a scenario of margin compression from deposit competition or credit normalization.
- Revenue headline masks base-effect distortion: Reported revenue growth of -24.37% YoY reflects an inflated $1,491.3 million Q3 2025 base that included $1,588.5 million of outsized interest income. Investors relying on headline growth could misjudge the underlying trajectory, and the true organic growth rate is harder to verify.
- Three-month underperformance and range-bound action: The stock is down 7.30% over three months versus SPY's -2.01%, a -5.29pp relative strength gap, and remains 11.2% below its $153.32 52-week high. Six-month performance of +3.75% roughly matches SPY's +3.11%, indicating two quarters of range-bound trading after the spring rally.
UMBF Technical Analysis
UMBF is in a sustained, if choppy, uptrend: the stock is up 26.82% over the past year and 16.84% year-to-date, and at $136.09 it sits at roughly 65.4% of its 52-week range of $103.38 to $153.32. That positioning — comfortably above the midpoint but still about 11.2% below the 52-week high — suggests a stock with positive momentum that has not yet become overextended, leaving room to run toward the prior peak rather than signaling a blow-off top. The 52-week high of $153.32 was set in mid-August, and the subsequent pullback to the $130s represents a normal consolidation within a longer-term advance rather than a trend break.
Short-term momentum has turned constructive even as the intermediate trend cooled: the stock is up 3.93% over the past month versus a 1.99% decline in SPY, a relative strength spread of +5.92 percentage points, while the 3-month change of -7.30% lags SPY's -2.01% by 5.29 points. This divergence — strong 1-month recovery inside a weak 3-month window — is characteristic of a mean-reversion bounce off the September/October lows near $128, and the fact that the rebound is outperforming the market suggests genuine accumulation rather than a dead-cat bounce. The 6-month change of +3.75% roughly matches SPY's +3.11%, confirming the stock has been range-bound for two quarters after its spring rally, with the recent uptick the first sign of a potential re-acceleration.
Key technical levels are well defined: support sits at the 52-week low of $103.38, with a nearer tactical floor around the $128-$130 zone that held repeatedly in September and October, while resistance is the $153.32 52-week high, with intermediate supply near $148-$150 where the stock stalled in late July and mid-August. A breakout above $153.32 would confirm a resumption of the primary uptrend and likely target new highs, whereas a breakdown below $128 would invalidate the recent recovery and put the $103.38 low in play. With a beta of 0.849, UMBF is roughly 15% less volatile than the market, which supports larger position sizing for a given risk budget but also means the stock will likely lag in sharp risk-on rallies — the maximum drawdown of -18.88% over the period is consistent with this moderate-volatility profile.
Beta
—
—
Max Drawdown
-18.9%
Largest decline past year
52-Week Range
—
Price range past year
Annual Return
+24.9%
Cumulative gain past year
| Period | UMBF Return | S&P 500 |
|---|---|---|
| 1m | +4.3% | -5.4% |
| 3m | -8.1% | -4.9% |
| 6m | +1.8% | -0.3% |
| 1y | +24.9% | +9.7% |
| ytd | +14.8% | +7.8% |
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UMBF Fundamental Analysis
Revenue has been on a strong upward trajectory despite a misleading headline: Q3 2026 revenue of $1,127.8 million was up from $1,116.9 million in Q2 and $867.1 million in Q1, and the reported -24.37% year-over-year growth rate is an artifact of an unusually inflated $1,491.3 million Q3 2025 base (which included outsized interest income of $1,588.5 million), not a genuine contraction. Sequentially, revenue has grown for three consecutive quarters, and the Q3 2026 interest income of $895.4 million versus $871.4 million in Q2 shows core earning-asset yields holding firm. The revenue mix remains led by Commercial Banking, with fee lines such as other financial services ($22.5 million) and investment securities gains ($11.0 million) providing diversification, though credit card fees were a $12.9 million drag — the growth trend supports a constructive investment case built on balance-sheet expansion and fee resilience.
Profitability is robust and improving: Q3 2026 net income of $278.1 million produced a net margin of 24.66%, up from 24.85% in Q2 on a similar base but dramatically above the 12.63% net margin in Q3 2025 and the 9.56% in Q1 2025. Gross margin came in at 65.74% in Q3 versus 67.15% in Q2 and 61.63% in Q1, while the operating margin of 30.32% compares favorably to 31.37% in Q2 and 14.59% in Q1 — the sequential dip in gross margin is modest and offset by a much stronger operating leverage story versus a year ago. EPS of $3.58 in Q3 (diluted $3.56) was stable versus Q2's $3.58 and up sharply from $2.38 in Q3 2025, and the 20.25% operating margin in the valuation feed understates the current run-rate given the Q3 improvement — for a regional bank, a ~25% net margin and ~30% operating margin are solidly above mid-tier peers.
Balance-sheet and cash-flow metrics are healthy for a bank: debt-to-equity of 0.494 is moderate, ROE of 9.13% and ROA of 1.43% are respectable though not elite, and trailing free cash flow of $1,168.7 million against a market cap of roughly $8.7-$10.4 billion implies a free-cash-flow yield of roughly 11-13%, which is strong. Quarterly operating cash flow has been consistently positive at $374.4 million (Q3), $349.3 million (Q2), and $361.3 million (Q1), comfortably covering the $43.8 million quarterly dividend and $11.6 million of capex, and the payout ratio of 19.3% leaves ample retention capacity. Cash on the balance sheet stood at $4.60 billion at Q3-end, and the current ratio of 0.015 reflects the bank's deposit-funded liability structure rather than a liquidity problem — overall, UMBF generates more than enough internal cash to fund growth without relying on external financing.
Quarterly Revenue
$1.1B
2026-09
Revenue YoY Growth
-24.4%
YoY Comparison
Gross Margin
65.7%
Latest Quarter
Free Cash Flow
$1.2B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is UMBF Overvalued?
Because UMBF is solidly profitable (Q3 2026 net income of $278.1 million), the PE ratio is the appropriate primary metric: the stock trades at 12.50x trailing earnings and just 9.62x forward earnings, a 23% compression that implies the market expects meaningful EPS growth — consistent with the analyst consensus EPS estimate of $15.53 for the forward period. The forward multiple of 9.62x is low in absolute terms for a bank with a ~25% net margin, and the gap between trailing and forward PE signals that the market is pricing in continued earnings normalization rather than deterioration. The PEG ratio of 7.54, however, warns that on the reported growth base the multiple is not cheap relative to growth, though this figure is distorted by the same trailing-EPS artifacts noted earlier.
Against the regional bank peer group, UMBF screens as a value name: its price-to-book of 1.14x is modest for a bank earning a 9.13% ROE, its price-to-sales of 1.97x is low, and its EV/EBITDA of 11.12x and EV/Sales of 4.15x are reasonable, while the 12.50x trailing PE sits below the typical 12-15x range for quality mid-cap regional banks. The 1.14x P/B versus a sector that often trades at 1.2-1.5x for comparable profitability suggests a discount of roughly 10-25%, which appears unjustified given UMBF's diversified fee mix, above-peer net margin of 15.81% (TTM) and improving efficiency. The 1.55% dividend yield and 19.3% payout ratio add an income cushion that supports the valuation floor.
Historically, UMBF's own valuation band has been wide: its PE ranged from about 7.55x in Q1 2023 to 20.72x in Q1 2025, and its P/B ranged from 0.97x to 1.59x over the same span, with the current 12.50x PE and 1.14x P/B sitting in the lower-middle of those ranges. The stock is therefore not priced for perfection — it is closer to the value end of its own history than the optimism end, which is notable given the earnings improvement underway. The main caveat is that the historical PS ratio has been volatile (from roughly 5.2x to 16.2x), so the current 1.97x PS reading should be treated cautiously; on balance, the valuation offers a margin of safety if the Q3 profitability run-rate holds.
PE
12.5x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 8x~14x
vs. Industry Avg
12.0x
Industry PE ~12.0x*
EV/EBITDA
11.1x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks center on margin durability and data quality. Gross margin declined sequentially from 67.15% in Q2 to 65.74% in Q3 while interest expense rose to $355.4 million from $338.8 million, showing that funding costs are creeping higher even as net interest income expands. The reported -24.37% YoY revenue decline, though an artifact of an inflated $1,491.3 million Q3 2025 base, complicates verification of organic growth, and the key-metrics feed's TTM EPS of roughly $0.08 against a $3.58 quarterly run-rate means any valuation conclusion built on trailing multiples carries material uncertainty. Debt-to-equity of 0.494 is moderate for a bank, but the 0.015 current ratio reflects a deposit-funded liability structure that leaves the balance sheet sensitive to deposit flight or a shift in funding mix.
Market and competitive risks include valuation compression and sector rotation. At 12.50x trailing and 9.62x forward earnings with 1.14x book, UMBF is not expensive, but the PEG ratio of 7.54 — even if distorted — highlights that the market is not yet paying for growth, and a re-rating depends on sustained ROE improvement from the current 9.13% toward peer levels. With a beta of 0.849, the stock is roughly 15% less volatile than the market, which cushions downside but also means it will lag in sharp risk-on rotations; the -7.30% three-month return versus SPY's -2.01% already demonstrates this relative lag during consolidation. Competitive pressure on deposit pricing and fee-generating institutional businesses, plus regulatory scrutiny of regional banks, could cap multiple expansion even if earnings hold.
The worst-case scenario is a chain in which deposit competition compresses net interest margin, credit costs normalize upward, and the Q3 efficiency gains prove transitory — pushing net margin back toward the 12.63% level of Q3 2025 and forcing analysts to cut targets toward the $145.00 low. In that scenario, the stock could retest its $128-$130 tactical support and, on a deeper derating, approach the $103.38 52-week low, implying roughly -24% from the current $136.09. A full retracement to the 52-week low would represent a loss of about 24%, consistent with the -18.88% maximum drawdown already observed over the period; the $145.00 analyst low target (+6.5%) represents the mild version of this adverse path, while a break below $128 would invalidate the recent recovery and put the 52-week low in play.
FAQ
The most severe risk is margin compression: interest expense rose to $355.4 million in Q3 from $338.8 million in Q2 and gross margin slipped to 65.74% from 67.15%, so if deposit costs outrun earning-asset yields, the ~25% net margin could retrace toward the 12.63% level of Q3 2025 and unravel the entire earnings-inflection thesis. Second is credit normalization — a provision build would compress the 30.32% operating margin and likely trigger analyst downgrades from the current 13 Buy / 3 Hold / 0 Sell distribution, with the $145.00 low target pricing exactly this scenario. Third is valuation and data-quality risk: the trailing EPS feed of roughly $0.08 against a $3.58 quarterly run-rate distorts trailing multiples and the 7.54 PEG, so investors relying on headline screens may misprice the stock, and a 1.14x P/B for a 9.13% ROE is only a discount if returns actually improve. Fourth is market sensitivity — with a beta of 0.849 the stock cushions broad selloffs but lags risk-on rotations, as shown by its -7.30% three-month return versus SPY's -2.01%, and a break below the $128-$130 support would put the $103.38 52-week low (-24%) in play.
The 12-month forecast is split into three scenarios. The base case carries 55% probability with a $155-$165 target range, assuming forward EPS of roughly $15.53 is achieved and net margin settles in the low-20s as deposit competition trims some of the Q3 efficiency gain — this aligns with the $160.94 analyst average target (+18.3%). The bull case at 25% probability targets $175-$185, requiring net margin to hold near 25% for a fourth consecutive quarter and P/B to re-rate from 1.14x toward 1.4-1.5x, consistent with the $185.00 high target (+36%). The bear case at 20% probability spans $103.38-$145.00, driven by a full margin retracement toward 12.63%, credit normalization, and a break of $128 support that puts the 52-week low in play. The base case is most likely because it requires only that current profitability largely holds rather than improves, and the unanimous above-market analyst targets (low $145.00) suggest the downside is already partly discounted.
UMBF looks modestly undervalued on both absolute and relative measures. The stock trades at 12.50x trailing and 9.62x forward earnings, with a 1.14x price-to-book against a 9.13% ROE — a level that typically commands 1.2-1.5x book for comparable regional banks, implying a 10-25% discount. Its own historical PE band has ranged from 7.55x to 20.72x and its P/B from 0.97x to 1.59x, placing the current multiples in the lower-middle of history rather than at an optimism premium. The 23% gap between trailing and forward PE signals the market expects EPS to grow toward the $15.53 consensus, and the 1.97x price-to-sales and 11.12x EV/EBITDA are unremarkable for a bank with a 15.81% TTM net margin. The caveat is the distorted trailing EPS feed (~$0.08 TTM versus a $3.58 quarterly run-rate), which inflates the 7.54 PEG and makes trailing comparisons unreliable; on forward earnings and book value, the market is paying a discount, not a premium.
From a risk/reward standpoint, UMBF screens favorably: at $136.09 it trades 18.3% below the $160.94 average analyst target, and even the lowest of the 16 published targets ($145.00) sits 6.5% above the market, with a 13 Buy / 3 Hold / 0 Sell distribution and a 1.81 recommendation mean. The valuation support is real — 9.62x forward EPS of $15.53 and 1.14x book against a 9.13% ROE — and the Q3 2026 earnings step-up to a 24.66% net margin gives the multiple room to re-rate. The main downside is margin durability: gross margin already slipped to 65.74% from 67.15% sequentially, and a full retracement toward the 12.63% net margin of Q3 2025 could send the stock to the $103.38 52-week low, roughly -24%. It is therefore a good buy primarily for investors with a 12-18 month horizon who want bank exposure at a discount and can absorb a 20%+ drawdown scenario; short-term traders face a stock that has lagged SPY by 5.29pp over three months and may stay range-bound until the next earnings confirmation.
UMBF is better suited to a medium-to-long-term hold than a short-term trade. It is a mature, dividend-paying regional bank (1.55% yield, 19.3% payout ratio) with a beta of 0.849 and a maximum drawdown of -18.88%, meaning it lacks the volatility profile that short-term traders need and instead rewards patience as earnings normalize and the multiple re-rates. The thesis depends on multi-quarter confirmation — three consecutive quarters of sequential revenue growth ($867.1M to $1,116.9M to $1,127.8M) and a net margin step-up from 12.63% to 24.66% year-over-year — which will only be validated through the Q4 2026 and Q1 2027 reports. Earnings visibility is reasonable given 16 analysts covering the name and a consensus forward EPS of $15.53, but the $40 spread in targets ($145-$185) shows magnitude uncertainty. A suggested minimum holding period is 12-18 months, long enough to capture the base-case move toward $155-$165 and collect roughly two years of dividends, with position sizing that accounts for a potential -24% drawdown to the 52-week low in the bear scenario.