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Investing.com - Keefe, Bruyette & Woods (KBW) lowered its price target on BCB Bancorp (NASDAQ:BCBP) to $9.00 from $9.50 while maintaining a Market Perform rating.
The research firm cited a mixed quarterly performance for the bank, with modestly higher net interest income and fees, but expenses that were $0.05 above estimates, resulting in a $0.04 pre-provision net revenue miss.
Net charge-offs were elevated during the quarter due to the movement of a previous non-performing loan to other real estate owned (OREO), according to KBW’s analysis.
The firm noted that excluding a cannabis credit, net charge-offs were modestly below their estimate and showed an improving trend.
KBW expects BCB Bancorp’s near-term earnings to face pressure from credit costs, lower net interest margin, and expenses at the current run rate, though longer-term earnings should improve as credit and deposit costs decrease. InvestingPro analysis reveals additional insights about the company’s outlook, with 6 more exclusive ProTips available to subscribers.
In other recent news, BCB Bancorp has reported better-than-expected pre-provision net revenue, attributed to improved net interest income and fees, despite facing weaker operating expenses. However, the bank experienced an 8% decrease in loan volumes and a 4% decline in deposits over the recent quarter. Piper Sandler has raised its price target for BCB Bancorp to $9.50, citing a positive credit outlook, but maintained a Neutral rating. The bank’s shares have been trading at a significant discount to tangible book value, largely due to investor concerns about credit quality. These concerns were highlighted by a steep first-quarter net loss, driven by a large specific reserve against a cannabis loan. Meanwhile, Keefe, Bruyette & Woods lowered its price target for the bank to $9.50 from $10.50, maintaining a Market Perform rating. This adjustment was due to ongoing credit challenges, with non-performing assets at 3.50% and net charge-offs at 0.78%. DA Davidson also reiterated a Neutral rating with a price target of $8.50, following the bank’s recent quarterly results.
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