BankUnited Hits 52-Week High: How Should You Play the Stock Now?

As optimism grows over additional interest rate cuts before the end of 2025, BankUnited Inc. BKU shares touched a 52-week high of $44.73 in yesterday’s trading session to finally close at $44.02. In the last six months, the BKU stock has gained 30.8%, outperforming the industry’s growth of 17.6% and the S&P 500 Index’s rally of 17%. It has also performed better than its peers, Fifth Third Bancorp FITB and Hancock Whitney Corporation HWC.Shares of Fifth Third Bancorp and Hancock Whitney have gained 13.7% and 13.8%, respectively, in the same time frame.6-Month Price Performance Image Source: Zacks Investment Research Does the BankUnited stock have more upside left despite touching its 52-week high? Let us find out.What’s Aiding BKU’s Growth?Robust Organic Growth: Supported by strong loans and deposit balances, BankUnited has been witnessing top-line growth. While the company's revenues declined in 2020 and 2023, the metric recorded a compound annual growth rate (CAGR) of 2.4% over the five years ended 2024, with the uptrend continuing in the first nine months of 2025. Over the same time frame, net loans witnessed a CAGR of 1%.Management has been strategizing on low-cost deposits, which are likely to provide additional support to top-line growth. As of Sept. 30, 2025, BKU’s non-interest-bearing demand deposits constituted 30.1% of total deposits.Management projects total deposits to grow in the mid-single digits in 2025, with non-interest-bearing demand deposits to rise in the double digits.Given the company's efforts to strengthen fee income, along with decent loan demand and robust deposit growth, its top line is expected to continue to improve. The Zacks Consensus Estimate for BKU’s 2025 and 2026 revenues is pegged at $1.08 billion and $1.13 billion, which indicate year-over-year growth rates of 6.9% and 4.7%, respectively.Revenue Growth Expectation Image Source: Zacks Investment Research Improving Margins: BankUnited has been witnessing a rise in net interest margin (NIM) on the back of declining funding costs and higher loan yields. The company’s NIM expanded to 2.73% in 2024 from 2.56% in 2023 and 2.68% in 2022. The upward momentum continued in the first nine months of 2025.While the Federal Reserve has started lowering interest rates this year, with cuts expected to continue in 2026, solid loan growth and decent economic expansion will likely continue to provide support to NIM in the near term.Management expects NIM to touch roughly 3% in 2025, with the fourth-quarter number being flattish sequentially.Impressive Capital Distributions: BankUnited has an impressive capital distribution plan. Since 2022, it has been increasing its dividend payouts annually, with the last hike announced in March 2025.Also, BKU has a share repurchase program in place. In July 2025, the company announced a new share buyback plan, authorizing up to $100 million in shares. While share repurchases continue to be the last priority for the company when planning to deploy capital, its earnings strength is expected to help it sustain efficient capital distribution activities, thus enhancing shareholder value.What’s Hurting BankUnited?Elevated Expense Base: BankUnited’s expenses have witnessed a five-year (2019-2024) CAGR of 5.7%, with the uptrend persisting during the first nine months of 2025. This increase was due to higher employee compensation and benefits costs, and technology expenses.Given the company’s continued investments in technological upgrades and inflation, its overall costs are expected to remain elevated. Management expects non-interest expenses to increase in the mid-single-digit range in 2025, probably closer to 3%.Expense Trend Image Source: Zacks Investment Research Weak Asset Quality: BankUnited’s asset quality has been deteriorating over the past few years. While the company recorded negative provisions in 2021, the metric witnessed a CAGR of 44% over the five years ended 2024. Further, net charge-offs (NCOs) saw a CAGR of 30.5% over the same time frame.While provisions and NCOs declined in the first nine months of 2025, both metrics are expected to remain elevated in the near term due to a challenging operating backdrop.Here’s How to Approach BKU Stock NowBankUnited remains well-positioned for top-line growth, given its improving deposit mix along with decent loan demand. Moreover, despite rate cuts, the company’s NIM is expected to be positively impacted in the near term, supported by loan growth and stabilizing funding costs.However, increasing expenses and deteriorating credit quality are concerning. Moreover, analysts have a mixed stance regarding BKU’s earnings growth prospects. The Zacks Consensus Estimate for the company’s 2025 earnings has been revised upward over the past 60 days. However, the 2026 earnings estimate has been revised lower.Earnings Estimate Revision Image Source: Zacks Investment Research Thus, given the concerns, investors should not jump to buy the stock now. However, those who already own the BKU stock in their portfolios should hold on to it as the company is not likely to disappoint in the long run.Currently, BKU carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.Beyond Nvidia: AI's Second Wave Is HereThe AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. Little-known AI firms tackling the world's biggest problems may be more lucrative in the coming months and years.See "2nd Wave" AI stocks now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Fifth Third Bancorp (FITB): Free Stock Analysis Report BankUnited, Inc. (BKU): Free Stock Analysis Report Hancock Whitney Corporation (HWC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks