City Hld (CHCO) Stock Forecast & Price Target

City Holding Co. exhibits strong financial performance with shares currently trading at a premium valuation of 15.6 times estimated earnings per share (EPS) for 2026 and 3.1 times tangible book value per share (TBVPS). The company has experienced a 24% increase in 2025 EPS estimates over the past year due to a resilient net interest margin (NIM), credit quality, and fee income, which have surpassed expectations. Furthermore, City Holding's asset expansion, coupled with a 6% growth in average earning assets (AEA) compared to an expected 2%, along with a solid increase in fee income that constitutes 20% of revenues, reinforces its favorable outlook in a volatile rate environment.

City Holding's stock outlook appears negative largely due to the ongoing risk associated with potential revenue loss stemming from regulatory scrutiny, specifically related to a $10 billion threshold that could impact financial operations. Despite improvements in key metrics, such as a decline in non-performing assets (NPAs) to 0.33% and a reduction in the allowance for credit losses (ACL) to 0.45%, this regulatory environment continues to pose a significant threat to revenue stability. Furthermore, the sensitivity of the tangible book value (TBV) estimates suggests that even minor fluctuations could correspondingly affect the overall valuation, which adds to the uncertainty surrounding the stock's performance.