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Investing.com - Citi has raised its price target on BankUnited (NYSE:BKU) to $38.00 from $36.00 while maintaining a Neutral rating on the stock. The bank, currently trading at an attractive P/E ratio of 10.5x and below book value at 0.92x, has maintained dividend payments for 15 consecutive years.
The adjustment comes as Citi fine-tunes its model ahead of BankUnited’s second-quarter earnings report, scheduled for July 23, with no changes to growth assumptions but modest tweaks to deposit mix and rate assumptions. According to InvestingPro, 4 analysts have recently revised their earnings expectations downward for the upcoming period.
These adjustments have resulted in a slightly stronger net interest margin (NIM) trend projection for the bank, according to Citi’s analysis.
The firm also lowered its loan loss provision (LLP) assumptions slightly, which positively impacted earnings per share forecasts for BankUnited.
Citi noted that its current modeling accounts for continued improvement in capital levels, but does not factor in a potential share repurchase program, which if announced could make current EPS projections too conservative and potentially drive a modest re-rating of shares higher.
In other recent news, BankUnited reported its first-quarter 2025 earnings, surpassing expectations with an earnings per share (EPS) of $0.78, compared to the forecasted $0.74. Despite this positive earnings surprise, the company faced a revenue shortfall, bringing in $255.41 million against the expected $264.35 million. The bank’s net interest margin fell slightly, though non-interest-bearing deposits saw significant growth. RBC Capital Markets adjusted its outlook on BankUnited, lowering the stock price target to $40.00 from $42.00, while maintaining a Sector Perform rating, highlighting the bank’s solid core commercial loan growth and stable credit trends. Meanwhile, Goldman Sachs maintained a Sell rating with a $38.00 price target, noting a mixed quarter due to a miss in net interest income and net interest margin. Jefferies initiated coverage with a Hold rating and a $39.00 price target, acknowledging BankUnited’s efforts in growing non-interest-bearing deposits but expressing caution over future growth and return metrics. These recent developments reflect a complex financial landscape for BankUnited, with analysts providing varied assessments.
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