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Investing.com - Baird upgraded Simmons First National (NASDAQ:SFNC) from Neutral to Outperform on Wednesday, setting a price target of $22.00. The stock currently trades at $17.38, near its 52-week low of $17.00, representing a potential 27% upside to Baird’s target. According to InvestingPro data, the bank is currently slightly undervalued compared to its Fair Value.
The upgrade follows Simmons First National’s approximately $327 million secondary offering during the third quarter of 2025. The company used these proceeds to realize a roughly $626 million loss from securities repositioning, which is expected to result in over 60 basis points of net interest margin improvement from the second quarter to the fourth quarter of 2025. This repositioning comes as the bank, with a market capitalization of $2.52 billion, aims to reverse its recent unprofitability, with analysts forecasting earnings of $1.58 per share for fiscal year 2025.
Baird expressed confidence in the new management team’s ability to execute following the capital raise. With improvements to profitability and balance sheet health, management can now refocus on balance sheet growth and business investment, potentially supporting growth in 2026 and 2027.
The bank currently maintains a CET1 ratio of 11.5%, indicating opportunities for capital deployment. Loan pipelines remain elevated at $1.6 billion in the commercial segment, representing a $367 million increase year-over-year, which should translate to solid loan growth in 2026. Despite recent challenges, InvestingPro data shows the bank has maintained dividend payments for an impressive 52 consecutive years, with a current dividend yield of 4.89%. For investors seeking deeper insights into SFNC’s financial health, comprehensive Pro Research Reports are available on InvestingPro.
Baird also views potential share repurchases positively, noting the stock has lagged since the equity raise, which was priced at approximately $18.50 per share. The stock currently trades at a price-to-book ratio of 0.75, suggesting a potential value opportunity despite its year-to-date decline of 19.07%.
In other recent news, Simmons First National Corporation reported its Q3 2025 earnings, which fell short of analyst expectations. The company posted earnings per share of $0.46, slightly below the projected $0.47, and reported revenue of $232.5 million, missing the forecasted $234.13 million. In addition to the earnings announcement, Simmons First National declared a quarterly cash dividend of $0.2125 per share on its Class A common stock, marking a 1 percent increase from the previous year. This dividend will be payable on January 2, 2026, to shareholders of record as of December 15, 2025.
Morgan Stanley has initiated coverage of Simmons First National stock with an Equalweight rating and set a price target of $22.00. The investment firm noted the company’s positive progress in areas such as profitability, efficiency, and organic growth capabilities. These developments reflect Simmons First National’s ongoing efforts to enhance its financial performance and shareholder value.
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