Flagstar Bank seen as speculative buy amid turnaround and improving earnings outlook

Flagstar Bank is considered a speculative 'Buy' as its management focuses on reducing costly deposits and repositioning assets. The bank's net interest margin improved to 2.15%, with net interest income rising from $331 million to $443 million year-over-year despite weak asset quality. Management projects earnings per share of $0.60–$0.65 for 2026 and $1.80–$1.90 for 2027, suggesting a forward price-to-earnings ratio of 7.9. The stock trades at a significant discount to book value, offering potential upside of 56%–101% if it re-rates to peer multiples.