Flagstar Financial (FLG) Shows Progress Amid Challenges With Gradual Recovery

Flagstar Financial, Inc. (NYSE:FLG) is one of the best bank stocks to buy trading under book value. Flagstar Financial, Inc. (NYSE:FLG) is navigating a challenging but potentially improving environment, following a revised price target from JPMorgan analyst Anthony Elian. The firm lowered its target from $13 to $12 while maintaining a Neutral rating. With shares currently trading at $11.31, the new target suggests a modest upside of around 6%. The revision comes in the wake of Flagstar’s second-quarter earnings report, which showed a mixed financial picture.

Flagstar Financial (FLG) Shows Progress Amid Challenges With Gradual Recovery

In Q2, Flagstar posted an adjusted net loss of $0.14 per share, falling short of expectations. Revenue declined 26% year-over-year to $496 million, missing consensus estimates by over $28 million. However, the quarter wasn’t without positives. Operating expenses were cut by $24 million from the previous quarter, and the bank improved its credit profile with a 9% drop in criticized loans and a 4% decline in nonaccrual loans. Commercial real estate exposure also shrank due to nearly $1.5 billion in payoffs.

Additionally, net interest margin ticked up to 1.81%, and the CET1 capital ratio improved to 12.3%, signaling stronger capital reserves. Flagstar is also building momentum in commercial banking, with a pipeline growth of 80% quarter-over-quarter. Despite ongoing losses, these developments point to gradual progress and a path toward stabilizing long-term performance.

While we acknowledge the risk and potential of FLG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than FLG and that has 10,000% upside potential, check out our report about this cheapest AI stock.

READ NEXT: 10 Must-Buy Semiconductor Stocks to Invest In and 10 Best SaaS Stocks to Buy According to Analysts.

Disclosure: None.