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Investing.com - Barclays (LON:BARC) upgraded First Interstate Bancsystems (NASDAQ:FIBK) from Underweight to Equalweight on Tuesday, raising its price target to $32.00 from $28.00. The bank, which maintains a solid 6.12% dividend yield and has paid dividends for 16 consecutive years, currently receives a "GOOD" overall financial health score from InvestingPro.
The upgrade comes approximately nine months after Barclays had downgraded the stock in October 2024, following the announcement of a new CEO. At that time, the firm had expressed concerns that new management would take a more conservative approach to credit and deal more aggressively with problem loans that had increased after the Great Western transaction integration.
Barclays noted that its earlier prediction proved accurate, as First Interstate took elevated charge-offs and rebuilt reserves over the subsequent six months. The firm now believes the bank stands on "surer footing with stable credit" moving forward.
The research firm expects First Interstate’s net charge-offs to align with management’s guidance of 20-30 basis points in losses. Barclays indicated that FIBK shares currently trade at a modest premium to peers on price-to-earnings ratio and a slight discount on tangible book value.
With profitability just below peers and no significant expectations for deal activity as either a buyer or seller, Barclays concluded that First Interstate shares are now fairly valued at current levels.
In other recent news, First Interstate BancSystem Inc. reported its Q1 2025 earnings, revealing a shortfall in both earnings per share (EPS) and revenue compared to analyst expectations. The company posted an EPS of $0.49, missing the forecasted $0.55, while revenue came in at $247 million against a projected $253.5 million. Despite these challenges, analysts at DA Davidson maintained a Buy rating, citing confidence in the bank’s potential for improved credit quality and organic growth. Piper Sandler also reaffirmed its Overweight rating with a $38.00 price target, highlighting potential growth in net interest income and the positive impact of strategic initiatives under new CEO Jim Reuter. Additionally, First Interstate BancSystem announced the appointment of David P. Della Camera as its new CFO, following a planned succession strategy. The company also plans to redeem $100 million of subordinated notes by August 2025, as stated in a recent SEC filing. These developments reflect the bank’s ongoing strategic adjustments and efforts to enhance its financial performance.
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