Amalgamated Bank rating cut by Piper Sandler to neutral

On Friday, Piper Sandler analysts lowered the stock rating for Amalgamated Bank (NASDAQ:AMAL) from Overweight to Neutral, adjusting the price target to $38.00 from the previous $42.00. The revision comes amid concerns over the Trump Administration’s recent policy announcements and ongoing litigation. According to InvestingPro data, AMAL currently trades at a P/E ratio of 10.23 and has delivered an impressive 48.42% return over the past year. The stock appears undervalued based on InvestingPro’s Fair Value analysis.

The Trump Administration has proposed a freeze on funding for environmental and climate change initiatives, with efforts to retract previously allocated funds. Concurrently, litigation has been initiated in Federal court to challenge the freeze. The uncertainty surrounding the duration and outcome of these developments has prompted Piper Sandler to adjust their stance on Amalgamated Bank’s stock. Despite these challenges, InvestingPro data shows the bank maintains strong fundamentals with a Basic EPS of $3.48 and has consistently raised its dividend for three consecutive years, with a 40% dividend growth in the last twelve months.

The analysts at Piper Sandler expressed that uncertainty tends to have a negative impact on stocks. They referenced a report from NPR News dated February 12, 2024, which detailed that despite court interventions, grant recipients, contractors, and activists have experienced delays in receiving government funding.

The legal proceedings and policy changes present a complex backdrop for Amalgamated Bank, which is known for its commitment to socially responsible banking and environmental stewardship. The bank’s focus on these areas may be particularly sensitive to changes in government policy and funding related to environmental issues.

Investors and market watchers will be closely monitoring the situation as it unfolds, given the potential implications for Amalgamated Bank’s operations and financial performance. The bank’s shares will likely reflect the evolving landscape as more information becomes available regarding the administration’s environmental policies and the legal challenges against them. For deeper insights into AMAL’s financial health and growth prospects, investors can access comprehensive analysis and additional ProTips through InvestingPro’s detailed research reports, which are available for over 1,400 US stocks.

In other recent news, Amalgamated Bank reported impressive financial results for the fourth quarter of 2024, exceeding expectations for both earnings and revenue. The bank achieved an earnings per share (EPS) of $0.90, surpassing the forecasted $0.78, while revenue reached $77.89 million, higher than the anticipated $76.92 million. These results highlight the bank’s strong operational performance, driven by its focus on sustainable lending and technology investments. Despite the positive earnings report, Amalgamated Bank’s stock experienced a decline in pre-market trading. The bank has also provided guidance for 2025, projecting core pre-tax pre-provision earnings between $159 million and $163 million and net interest income ranging from $293 million to $297 million. Analyst firms such as Piper Sandler have noted the bank’s strategic focus on growth areas and its resilience in the financial sector. Amalgamated Bank’s leadership emphasized the transformative potential of 2025, with plans to make significant investments aimed at increasing revenue in 2026. The bank’s strategic initiatives include expanding its residential and commercial PACE loans, with expectations of two Federal Reserve rate cuts in 2025.

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