Long-established in the Banks industry, M&T Bank Corp (MTB, Financial) has enjoyed a stellar reputation. It has recently witnessed a daily gain of 0.98%, juxtaposed with a three-month change of 5.51%. However, fresh insights from the GuruFocus Score Rating hint at potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation suggest that the company might not live up to its historical performance. Join us as we dive deep into these pivotal metrics to unravel the evolving narrative of M&T Bank Corp.
Understanding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 4/10
- Profitability rank: 6/10
- Growth rank: 5/10
- GF Value rank: 9/10
- Momentum rank: 2/10
Based on the above method, GuruFocus assigned M&T Bank Corp the GF Score of 69 out of 100, which signals poor future outperformance potential.
Snapshot of M&T Bank Corp's Business
M&T Bank Corp, with a market cap of $21.22 billion, is one of the largest regional banks in the United States, with branches in New York, Pennsylvania, West Virginia, Virginia, Maryland, Delaware, and New Jersey. The bank was founded to serve manufacturing and trading businesses around the Erie Canal and is primarily focused on commercial real estate and commercial-related lending, with some retail operations also present. The company's sales stand at $9.53 billion.
Financial Strength Analysis
M&T Bank Corp's financial strength indicators present some concerning insights about the company's balance sheet health. The company's debt-to-Ebitda ratio is 9999, which is above Joel Tillinghast's warning level of 4 and is worse than 0% of 31 companies in the Banks industry. Tillinghast said in his book “Big Money Think's Small: Biases, Blind Spots, and Smarter Investing” that a high debt-to-Ebitda ratio can be a red flag unless tangible assets cover the debt.
Conclusion
Considering the company's financial strength, profitability, and growth metrics, the GuruFocus Score Rating highlights the firm's unparalleled position for potential underperformance. While M&T Bank Corp has a rich history and a significant presence in the banking industry, the current metrics suggest that it may struggle to maintain its past performance. Investors should consider these factors when making investment decisions.
GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
