Bank OZK stock rating upgraded by Raymond James on loan growth outlook

Published 08/07/2025, 11:44
Bank OZK stock rating upgraded by Raymond James on loan growth outlook

Investing.com - Raymond (NSE:RYMD) James has upgraded Bank OZK (NASDAQ:OZK) from Market Perform to Outperform and established a price target of $58.00. The stock, currently trading at $50.43, has shown strong momentum with a 31% return over the past year and trades at a P/E ratio of 8.2x.

The upgrade comes ahead of Bank OZK’s second-quarter 2025 earnings release scheduled for July 17, 2025, reflecting Raymond James’ increased confidence in the bank’s ability to meet or exceed its mid- to upper-digit loan growth outlook. According to InvestingPro, the company has maintained strong financial health with an overall score of "GREAT" and revenue growth of 6.5% in the last twelve months.

Raymond James cited several positive factors in its decision, including the beneficial impact of $5.6 billion in maturing time deposits repricing lower in the second quarter at 4.55% amid modest declines in Treasury yields.

The firm also highlighted Bank OZK’s ongoing share repurchases, including a recently announced $200 million share program, and its recently increased dividend, which represented the bank’s 60th consecutive quarterly dividend increase. InvestingPro data shows the bank has raised its dividend for 28 consecutive years, with a current yield of 3.49% and impressive dividend growth of 15.79% over the past year.

Raymond James noted Bank OZK’s discounted valuation and high short interest of 17.8% - the highest in the firm’s coverage universe - creating what it views as a favorable risk-reward dynamic, particularly as the operating backdrop has improved since early April 2025. With analyst price targets ranging from $40 to $64, investors seeking deeper insights can access comprehensive valuation analysis and 7 additional ProTips through InvestingPro’s detailed research reports.

In other recent news, Bank OZK announced a strong performance for the first quarter of 2025, reporting earnings per share (EPS) of $1.47, surpassing analyst forecasts of $1.41. The bank’s revenue also exceeded expectations, reaching $409.23 million compared to the projected $403.2 million. Bank OZK’s board declared a quarterly cash dividend of $0.44 per share on its common stock, marking the 60th consecutive quarter of dividend increases. Moody’s Ratings affirmed all ratings for the bank, adjusting the outlook from negative to stable, citing the bank’s robust profitability and effective capital retention strategies. Stephens analysts revised their price target for Bank OZK to $54 from $59, maintaining an Equal Weight rating, following the bank’s first quarter results. The bank’s focus on diversification is evident with the launch of a new natural resources group and plans to open 34 new branches in 2025. Despite macroeconomic uncertainties, Bank OZK continues to maintain a positive growth outlook, emphasizing its strategy to expand beyond traditional real estate lending.

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