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On Friday, BofA Securities analyst Ebrahim Poonawala increased the price target for Cullen/Frost Bankers, traded on the New York Stock Exchange under the ticker (NYSE:CFR), to $145 from the previous target of $142, while reiterating a Buy rating on the stock. According to InvestingPro data, the stock currently trades at $125.46, with analyst targets ranging from $110 to $164, suggesting potential upside. The company, with a market capitalization of $8.06 billion, appears slightly overvalued based on InvestingPro’s Fair Value analysis.
Cullen/Frost Bankers’ shares have outperformed their peers following the announcement of a first-quarter earnings per share (EPS) of $2.30, surpassing both BofA Securities’ estimate and the consensus, which were $2.24 and $2.18, respectively. The company also raised its full-year 2025 net interest income (NII) and fee income guidance, with the NII expected to grow by 5% to 7% year-over-year, up from the previously forecasted 4% to 6%. InvestingPro reports that 4 analysts have recently revised their earnings estimates upward, with the company maintaining a strong financial health score of 2.72 out of 5. This updated guidance includes the assumption of two additional interest rate cuts, totaling four for the year, which suggests confidence in the company’s performance despite potential rate-driven headwinds.
The first-quarter earnings beat was primarily attributed to stronger fee income, which came in at $124 million compared to the BofA Securities’ estimate and consensus of $113 million and $116 million, respectively. Additionally, the company reported lower provisions for credit losses at $13.1 million, which was below the BofA Securities’ estimate and consensus of $17.5 million and $17.7 million, respectively.
In light of these results, BofA Securities has raised its full-year 2025 and 2026 earnings estimates by 2.8% and 2.7%, resulting in new projections of $9.38 and $9.24 EPS, respectively. The positive adjustments reflect the strong performance and optimistic outlook for Cullen/Frost Bankers, as indicated by the raised guidance and recent financial results. InvestingPro highlights the company’s impressive 32-year streak of consecutive dividend increases, trading at a P/E ratio of 14.09x. For deeper insights into CFR’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Cullen/Frost Bankers reported strong financial performance for the first quarter of 2025, with earnings per share (EPS) at $2.30, exceeding the forecasted $2.15. The company’s revenue also surpassed expectations, totaling $560.41 million compared to the predicted $538.79 million. Following these results, several analysts adjusted their outlooks on Cullen/Frost. Evercore ISI upgraded the stock from Underperform to In Line, raising the price target to $132, while Stephens increased its price target to $141, maintaining an Equal Weight rating. DA Davidson also adjusted its price target to $135 but kept a Neutral rating on the stock.
Conversely, Citi took a more cautious stance, reducing its price target to $109 and maintaining a Sell rating, citing concerns over the bank’s operational efforts and growth strategy. Analysts noted that Cullen/Frost’s recent earnings beat was driven by loan and deposit growth, as well as strategic expansion efforts. Despite the mixed analyst ratings, the bank’s management remains optimistic, projecting continued growth with expectations of Federal Reserve rate cuts and increased net interest income. Cullen/Frost’s strategic initiatives, including expanding its branch network and enhancing its consumer banking services, are anticipated to contribute positively to its financial performance in the coming years.
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