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Investing.com - Piper Sandler upgraded Cadence BanCorp (NYSE:CADE) from Neutral to Overweight and raised its price target to $42.00 from $36.00 following the completion of the Industry Bancshares acquisition. The bank, currently trading at a P/E ratio of 11.37x and showing "GREAT" financial health according to InvestingPro metrics, has demonstrated strong fundamentals with a 45.52% revenue growth over the last twelve months.
The acquisition, which closed on July 1, 2025, is expected to improve Cadence BanCorp’s profitability metrics, with Piper Sandler now projecting a return on assets of approximately 1.25% and a return on equity of about 11% by 2026, up from previous estimates of 1.15% and 9.5% respectively. The bank has maintained dividend payments for 41 consecutive years, currently offering a 3.22% yield.
Piper Sandler increased its earnings per share estimates for Cadence BanCorp to $3.12 for 2025 and $3.52 for 2026, up from previous forecasts of $2.90 and $3.05.
While the Industry Bancshares acquisition initially received mixed investor reactions due to approximately 8.5% tangible book value per share dilution, Piper Sandler believes the completed transaction will drive share price appreciation through additional scale, cost savings, and increased liquidity.
The investment firm sees potential for more than 25% total return for Cadence BanCorp shares over the next 12 months, supporting its upgraded Overweight rating. This aligns with InvestingPro’s analysis, which indicates the stock is currently undervalued. Discover more insights and 6 additional ProTips for CADE through the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Cadence Bank has completed its $4.4 billion acquisition of Industry Bancshares, Inc., enhancing its presence in Texas with a rapid approval process. The acquisition, finalized on July 1, expands Cadence’s network to over 380 branches and includes key banking subsidiaries, maintaining customer service continuity. Keefe, Bruyette & Woods reiterated an Outperform rating for Cadence Bank, highlighting the acquisition’s positive impact on earnings per share and projecting it to be 13% accretive to 2026 earnings. Moody’s Ratings affirmed Cadence Bank’s ratings, adjusting the outlook to stable, noting improvements in asset quality and reduced exposure to commercial real estate construction lending.
Additionally, Cadence Bank announced a new share repurchase program authorizing the buyback of up to 10 million shares, contingent on Federal Reserve approval. This initiative aims to provide the bank with flexibility in capital management. The program is slated to expire on December 31, 2025, and reflects Cadence’s strategic focus on effective capital utilization. The bank’s profitability remains strong, with net income to tangible assets at 1.09% in the first quarter of 2025. These recent developments indicate Cadence Bank’s ongoing efforts to strengthen its financial position and expand its market presence.
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