JPMorgan says the late Charlie Munger would love this wonderful bank trading at a fair price

JPMorgan said one regional bank is so appealing that it would have attracted attention from the late Charlie Munger. “When we think of the late, great Charlie Munger and his mantra to ‘buy wonderful businesses at fair prices,’ the bank that fits this bill in our view is Cullen Frost,” the firm’s bank analyst Steven Alexopoulos said in a note. Berkshire Hathaway’s vice chairman died in November about one month shy of his 100th birthday. Early in his career, Munger broadened Warren Buffett’s investing approach , eventually turning away the younger Buffett from buying dirt cheap, “cigar-butt” companies that might still have a little smoke left in them. Instead, he focused on quality companies selling at fair prices. CFR YTD mountain Cullen/Frost Bankers On April 25, Cullen/Frost Bankers , headquartered in San Antonio, Texas, posted an earnings miss for the first quarter, triggering a big sell-off in the stock, according to FactSet. However, JPMorgan said the bank’s “strong organic growth story” remained intact. Specifically, the analyst said Cullen/Frost’s loan growth continued growing at an 11% annualized pace last quarter, whereas most of its peers saw stagnation in the area. “We see underperformance in CFR as overblown and provides an even more attractive buying opportunity into a company that is poised to be a compounder of outsized growth in the key metrics that drive long-term performance of bank stocks,” JPMorgan said. The stock fell nearly 7% in April, and it’s also down about 3% this year. JPMorgan said investors can now buy the shares at 13.1 times forward earnings, compared to a 16-time historical average. The bank maintained its overweight rating and has a 12-month price target of $140 per share, which would translate into 32% upside from Tuesday’s close of $105.62. — CNBC’s Michael Bloom contributed reporting.