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Investing.com - Piper Sandler has initiated coverage on Central Pacific Financial (NYSE:CPF), a $774 million market cap regional bank, with an Overweight rating and a $35.00 price target. According to InvestingPro analysis, the stock appears slightly undervalued at its current trading price of $28.60.
The research firm cited the bank’s discounted valuation despite its competitive profitability outlook as a key factor in the rating decision. Trading at a P/E ratio of 12.7x and delivering an 11% return on equity, Piper Sandler highlighted Central Pacific Financial’s ability to generate stronger organic growth and gain market share from its position as the fourth-largest bank in Hawaii. Unlock more valuable insights about CPF with InvestingPro, which offers exclusive analysis and 6 additional ProTips.
The firm noted that Central Pacific Financial has good net interest margin visibility with defensive asset yields and has implemented a proactive deposit pricing strategy during the current cycle. Piper Sandler expects net loan growth to resume in the second half of the year, supported by stronger pipelines and the subsiding deliberate run-off in the bank’s U.S. mainland portfolio.
Central Pacific Financial’s solid capital position should support increased organic growth, modest dividend increases, and additional share buybacks, according to the research firm’s analysis.
Piper Sandler also mentioned that any potential M&A activity by Central Pacific Financial would likely target complementary fee businesses rather than whole bank acquisitions.
In other recent news, Central Pacific Financial Corp. reported its second-quarter earnings for 2025, which exceeded market expectations. The company achieved an earnings per share (EPS) of $0.67, surpassing the anticipated $0.64. Additionally, Central Pacific Financial’s revenue reached $72.81 million, outpacing the forecast of $71.8 million. These results highlight the company’s strong financial performance in the quarter. Despite the positive earnings and revenue figures, the stock’s recent movement suggests a cautious market sentiment. Analysts have not provided any new upgrades or downgrades for Central Pacific Financial at this time. Investors may find these developments noteworthy as they assess the company’s performance and market position.
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