Popular came into this Q3 2026 earnings print with its stock already under pressure, and the latest move did not help. The shares slipped another 2.8% in Friday trading, even as the bank posted quarterly earnings per share of US$4.21 and net income of US$266.3 million. For a lender often viewed as a high return on equity story, the real headline this quarter sits in profitability. Return on tangible common equity landed at 15.8%, strong in absolute terms, yet clearly not enough to satisfy a market already pricing in a richer narrative.
Like the strength in Popular's 15.8% return on tangible common equity but worried that the market still is not buying the story at the current share price? Benchmark it against a broader set of high quality peers by scanning our list of solid balance sheet and fundamentals stocks (26 results) .
Q3 2026 Earnings Summary
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Revenue (Q3 2026 vs. Q3 2025):US$815.995m vs. US$742.575m (up 9.9%)
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Net Income, Excl. Extra Items (Q3 2026 vs. Q3 2025):US$266.334m vs. US$210.964m (up 26.2%)
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Basic EPS (Q3 2026 vs. Q3 2025):US$4.21 vs. US$3.15 (up 33.8%)
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Net Interest Margin, or NIM (Q3 2026 vs. Q3 2025):4.17% vs. 3.9% (up 27 bps)
Ask Charlie what Popular's buybacks signal about next year's plans .
Popular's Fee And Capital Ambitions On Trial
Popular's bullish script leans heavily on digital projects feeding fee income and future operating leverage.
"Ongoing investments in digital infrastructure, including Popular's treasury and cash management platform, Mi Banco marketplace and branch upgrades, are starting to show through in higher debit and credit card fee income and are expected to support further noninterest revenue growth and operating leverage."
Card and service activity is helping, yet the quarter shows the trade offs. Noninterest income landed at US$176m and actually slipped quarter on quarter, even with a US$5m refinancing benefit. Expenses climbed to US$506m. Operating expense growth tracking near 2% supports the cost program story, but the noninterest revenue leg is not yet a clear beat.
Puerto Rico Risk Narrative Faces A Reality Check
Concern around Popular's heavy Puerto Rico exposure is the core bear story that investors keep stress testing.
"Continued high geographic concentration in Puerto Rico exposes Popular to local economic volatility, demographic shifts such as a shrinking and aging population, and potential natural disasters, which could weaken loan demand, pressure asset quality and reduce revenue and earnings stability."
Current figures paint a mixed picture rather than a clear crack. Public sector deposits declined US$1.2b, although management flagged this as expected, and broader customer balances eased only modestly. Credit metrics stayed generally stable, with net charge offs of US$73m and lower levels than last quarter, even as nonperforming loans stepped up by US$52m to US$466m. So far, stress remains isolated, not systemic.
One Narrative has put a figure on that disagreement. → See the Narrative with its higher Fair Value, assumptions and all .
Find Earnings Disconnects Early
Popular highlights how a clear profit report can still leave investors uncertain. The real opportunity sits in stocks that could be undervalued before expectations catch up.
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Company 1 - 41% below our estimate - sells advanced circuit systems into AI data centers and defense programs as clients prepare for heavier compute loads.
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Company 2 - 49% below our estimate - secures large fixed price infrastructure and military facility projects as public agencies commit to complex, long duration construction work.
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Company 3 - 17% below our estimate - builds electrical and communications systems for hyperscale data centers as operators expand capacity for heavier AI and cloud workloads.
Those are three of them. See all 29 potentially undervalued companies →
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include BPOP .
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