FLG Stock Forecast & Price Target

Flagstar Bank is viewed positively because the reset in expectations after the 3Q selloff appears to have largely priced in the tougher credit backdrop, while the stock still trades at about 0.64x 2027E P/TBV. Higher rates are slowing NAL resolution, but management still expects NALs to decline from about $2.8B to $2.6B by YE26 and to roughly $2.0B through 2027, supporting a gradual cleanup of legacy credit issues. The long-term earnings case remains intact through C&I growth, $4B-$4.5B of CRE runoff, and higher repricing, which should help NIM and returns even though prior 2027 profitability objectives are now pushed to 2028.

Flagstar Bank is facing a weaker fundamental setup as 2026 and 2027 EPS estimates were cut to $0.12 and $0.73, while updated guidance points to lower NII, lower NIM, and materially higher provisions. The 3Q EPS of $0.01 missed expectations, driven by lower PPNR and elevated credit costs, and credit quality remains pressured with NPA ratio at 3.23% and criticized/classified loans up 6% q/q to $12.3B. Management’s outlook has deteriorated amid a higher-for-longer rate environment, stronger deposit competition, and added stress in the CRE portfolio, while peer-level profitability was pushed from 2027 to 2028.